Legislators look into resolution on 2% VAT reduction
The resolution aims to stimulate consumption in line with the current economic context, thus supporting citizens and businesses; boosting production, trade, tourism, and domestic consumption, thereby contributing to the State budget and the national economy, towards implementing the five-year socio-economic development plan in 2021–2025, annual development goals, and the economic restructuring plan in 2021 – 2025; and creating momentum for economic growth in the next five years.
Minister of Finance Nguyen Van Thang speaks at a discussion session of the NA. (Photo:V NA)
Hanoi (VNA) –📖 Lawmakers discuss a resolution of the National Assembly (NA) on a 2% VAT reduction to support economic recovery during discussions at the hall on May 28 as part of the 15th NA’s 9th session.
The resolution aims to stimulate consumption in line with the current economic context, thus supporting citizens and businesses; boosting production, trade, tourism, and domestic consumption, thereby contributing to the State budget and the national economy, towards implementing the five-year socio-economic development plan in 2021–2025, annual development goals, and the economic restructuring plan in 2021 – 2025; and creating momentum for economic growth in the next five years.
Accordingly, a 2% VAT reduction will be applied to goods and services currently subject to a 10% tax rate, lowering it to 8%, except for the categories of telecommunications; financial, banking, securities, and insurance services; real estate business; metal and mining products (excluding coal); and goods and services subject to special consumption tax (excluding gasoline). The policy will be in effect from July 1, 2025, to December 31, 2026.
Under the review report by the NA’s Committee for Economic and Financial Affairs, the Committee generally agrees with the Government’s proposal to continue applying the 2% VAT reduction policy. It also recommends that the Government consider and incorporate the Committee’s feedback to finalise the draft resolution.
The reviewing body requested the Government to assess and calculate the fiscal balance capacity when implementing this resolution, taking into account the budgetary impacts of other revenue-reduction policies and newly arising expenditures from now until the end of the year. These evaluations should be reflected in the 2025 fiscal report and serve as a basis for drafting the 2026 budget plan. The Government is responsible for managing revenue tasks and ensuring the 2025 state budget remains balanced within the deficit limit approved by the NA.
During their discussions, legislators also discussed the draft laws on amending and supplementing a number of articles of the Law on Planning and the Law on Energy Efficiency and Conservation; and a resolution of the NA amending and supplementing a number of articles of the Regulation of the NA session issued together with Resolution No. 71/2022/QH15 of the legislature./.
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