The government agreed to reduce VAT by 2% in the first half of 2024

The government agreed to reduce VAT by 2% in the first half of 2024

Deputy Prime Minister Le Minh Khai agreed with the Ministry of Finance's proposal to reduce VAT by 2% in the first 6 months of 2024. It is expected that this VAT reduction will cause a budget revenue loss of about VND 25,000 billion.

vat
The government agrees to reduce VAT by 2% in the first 6 months of 2024. Photo: Ngoc Le

On October 17, the Government Office said it had issued official dispatch No. 7866/VPCP-KTTH on the proposal to reduce value added tax (VAT) for the first 6 months of 2024.

Accordingly, Deputy Prime Minister Le Minh Khai agreed with the Ministry of Finance’s proposal to reduce VAT by 2% in the first 6 months of 2024.

The Deputy Prime Minister assigned the Ministry of Finance to urgently compile proposals to submit to the National Assembly to continue reducing VAT by 2% in the first 6 months of 2024… if the economic and business situation is still difficult in the Status Report. State budget implementation in 2023, state budget estimate in 2024.

According to the proposal of the Ministry of Finance to the Prime Minister, the VAT reduction will continue to be implemented from January 1, 2024 to June 30, 2024.

The 2% reduction in VAT tax rate will continue to be applied to groups of goods and services currently applying the 10% tax rate (to 8%).

The tax reduction will exclude the following groups of goods and services: Telecommunications, information technology, financial activities, banking, securities, insurance, real estate business, metal production and manufacturing fabricated metal products, mining industry (excluding coal mining), coke production, refined petroleum, chemical and chemical product manufacturing, goods and services subject to excise tax special receptor.

Previously in 2022, the National Assembly issued Resolution No. 43 on fiscal and monetary policies to support the Socio-Economic Recovery and Development Program, which proposed a solution to reduce VAT by 2% for Some groups of goods and services are subject to a 10% VAT rate from February 1, 2022 to December 31, 2022.

In 2023, facing the difficulties of the economy, the National Assembly continues to implement the VAT reduction policy according to Resolution No. 43 from July 1, 2023 to December 31, 2023 in Resolution No. 101 of the National Assembly on the 1st Session. 5, 15th National Assembly.

The solution to reduce VAT along with other tax, fee and charge solutions are creating great conditions to help businesses reduce production costs, increase profits, and increase the ability to stimulate demand.

It is estimated that after 3 months of implementation (from July 2023 to September 2023), the 2% VAT reduction policy has supported businesses and people with a total of about 11,700 billion VND. Thereby contributing to reducing the cost of goods and services, thereby promoting production and business and creating more jobs for workers, contributing to stimulating consumer demand and promoting production and business development.

According to statistics, from 2020 up to now the total value of solutions for exemption, reduction and extension of taxes, fees, charges and land rent (corporate income tax, personal income tax, VAT, tax special consumption tax, import tax, environmental protection tax, fees, charges and land rent) has amounted to about 700,000 billion VND, in 2023 alone it will be about 196,000 billion VND and as of September 2023, it has been implemented. about 152,200 billion VND.

Theo Báo Lao động