Normally levied at 10 percent, Vietnam VAT was reduced to 8 percent from July 1, 2023, and now extended by June 30, 2024, approved by the National Assembly on November 29
Last year, to spur the pandemic-hit local economy, the National Assembly passed a resolution to reduce VAT by 2 percent from July 1, 2023 to December 31, 2023. The reduction is now extended by June 2024.
The reduction policy applied for almost all products, except for telecommunications, information technology, finance, banking, securities, insurance, real estate, metals and metal products, mining, refined petroleum, chemicals, and items subject to excise tax. This latest iteration of the VAT reduction is expected to follow the same basic guiding principles as previous VAT reductions.
With this cut, the State budget revenue is estimated to be reduced by around VND 25 trillion in the first six months of 2024, by the Ministry of Finance. However, this will help to boost the national economic growth which has been impacted by the prolonged COVID-19 pandemic, along with the profound impact of worldwide political instability and economic fluctuations.
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