NA approves resolution on VAT cut

NA approves resolution on VAT cut

The 15th National Assembly (NA) voted to pass a resolution on a value-added tax (VAT) reduction on Tuesday morning as part of its ongoing 9th session.

The VAT rate for goods and services will be lowered from 10 per cent to 8 per cent from July 1 this year to December 31 next year. — Photo baodautu.vn

The value-added tax (VAT) rate for goods and services will be lowered from 10 per cent to 8 per cent from July 1 this year until December 31, 2026, following a vote from lawmakers on Tuesday morning. 

The 15th National Assembly (NA) voted to pass a resolution on the VAT reduction as part of its ongoing 9th session, with 452 deputies present voting in favour, accounting for 94.6 per cent of the total.

According to the resolution, the VAT rate will be reduced to 8 per cent for goods and services specified in Clause 3, Article 9 of the Law on VAT 48/2024/QH15, except for the following groups: telecommunications, finance, banking, securities, insurance, real estate, metal products, mineral products (except coal) and goods and services subject to the special consumption tax (except petrol).

Compared to previous resolutions, the new law expands the coverage of the VAT cut to transportation, logistics and IT products and services.

The Government reported that the VAT reduction may lead to decreases of some VNĐ39.5 trillion (US$1.5 billion) in State budget revenue during the second half of this year, and about VNĐ82.2 trillion next year.

However, the move is expected to boost production and business activities, thereby helping to drive revenue sources for the State budget.

To offset revenue shortfalls caused by policy implementation, the Government will focus on directing ministries, central agencies and localities to carry out key solutions in a coordinated manner.

A top priority is the implementation of fiscal policies and measures under resolutions issued by the NA and the Government.

These aim to support businesses and citizens while stimulating growth drivers, with a target of at least 8 per cent GDP growth this year and an ambition to reach double digits if conditions improve. This level of growth is expected to help boost State budget revenue.

The Government will also take strong action to improve budget collection, strengthen management, streamline administrative procedures and promote digital transformation in tax administration.

Areas of focus include land revenue, real estate transfers, e-commerce and digital platform businesses.

E-invoicing from point-of-sale systems will be expanded. This applies to sectors such as retail, food and beverage services, hotel chains, fuel trading and gold businesses.

The goal is for this year’s budget revenue to increase by around 10 per cent compared to estimated figures from last year.

The Government will also manage State budget expenditures strictly, as well as enhance spending efficiency. It will proactively use contingency funds, reserves and other lawful resources to finance disaster and epidemic response efforts, along with other urgent tasks as required by regulations, ensuring balanced budgets at all administrative levels. 

Bizhub