Government proposes extending VAT cut until year end

By VNA May 2, 2024 | 09:52 pm PT

People shop in a supermarket in Ho Chi Minh City. Photo by VnExpress/Thanh Tung

The Government has proposed extending the cut in value-added tax (VAT) from 10% to 8% on specific groups of goods and services from July 1 until the end of the year to support business and production activities.

In its proposal sent to the National Assembly, the Ministry of Finance held that it is necessary to study and propose relevant measures for 2024, including extending the 2% reduction in VAT, the payment deadline for corporate income tax, special consumption tax and personal income tax, and reduction of several fees and land rental, which were applied in 2023.

With the 2% tax cut in the second half of the year, the State budget will be slashed by some VND24 trillion (nearly $994.7 million), or around VND4 trillion per month.

The tax incentive reduced the government revenues by more than VND23.48 trillion in H1.

Highlighting the formidable challenges to the economy brought by the Covid-19 pandemic, climate change and natural disasters, the Government said that a wide range of financial measures were implemented during 2020-2023, worth some VND700 trillion, to prop up the economy.