The Government proposes to reduce VAT by 2% until the end of 2026

The group of goods and services serving production, business, tourism and consumption that are currently subject to a 10% tax rate could be reduced by 2% in the next 18 months, if this proposal of the Government is approved by the National Assembly.

On the morning of May 13, the National Assembly heard the Government's presentation on the draft resolution to reduce value added tax (VAT).

Presenting the Government's proposal, Minister of Finance Nguyen Van Thang said that from 2022 to the first 6 months of 2025, the National Assembly has resolved to reduce 2% VAT on groups of goods and services currently applying a tax rate of 10% (to 8%), except for some groups of goods and services.

According to the Government, this policy creates great conditions to help businesses reduce production costs, increase profits, and increase the ability to stimulate demand. However, the domestic economy still faces many difficulties, especially when the US announced to impose reciprocal tariffs on countries, including Vietnam.

To create momentum to promote and develop the economy and support people and businesses, according to the Government, it is necessary to continue implementing the policy of reducing value added tax.

Minister of Finance Nguyen Van Thang presented the Government's proposal on reducing value added tax (Photo: Hong Phong).

The Minister of Finance said that the tax reduction plan in this draft resolution has changed compared to previous resolutions of the National Assembly.

Specifically, in principle, the proposed tax reduction, the Government emphasized that it would only reduce 2% of tax on goods and services currently subject to a 10% tax rate.

In particular, the Government proposed expanding the subjects eligible for a 2% reduction in value added tax rates for goods and services serving production, business, tourism and consumption.

According to the Government, this regulation aims to support increased purchasing power, stimulate consumption, domestic tourism, and special goods that contribute significantly to production and business; no tax reduction is applied to goods that are mineral resources, except for special goods that contribute significantly to production and business such as mineral products (except coal) and metal products.

Goods and services subject to special consumption tax (except gasoline) are also not subject to value added tax reduction.

As for services such as telecommunications, financial activities, banking, securities, insurance, and real estate business, as before, they continue to be in the group that is not eligible for tax reduction.

The Government's proposed application period is from July 1 to December 31, 2026.

Assessing the impact of this policy on the State budget revenue, the Government calculated that the budget revenue reduction in the last 6 months of 2025 and the whole year of 2026 will be nearly 122,000 billion VND.

For people and businesses, a 2% reduction in value added tax will directly reduce people's costs in consuming goods and services.

Examining this content, the majority of opinions in the Economic and Financial Committee agreed with the Government's proposal.

Delegates attending the 9th session at Dien Hong Hall, morning of May 13 (Photo: Hong Phong).

According to the auditing agency, the Government has proposed a longer application period for this VAT reduction policy (18 months) and with a broader scope than previous tax reductions, so issuing a separate resolution may be appropriate.

However, there are also opinions in the auditing agency that the continuous extension and prolongation of the tax reduction policy creates a bad precedent, making the tax policy unstable and inconsistent.

In addition, narrowing fiscal and policy space will reduce the ability to respond to more serious economic crises in the future.

The Economic and Financial Committee recommends that the Government have effective solutions to ensure that difficulties and obstacles in policy implementation are overcome due to the fact that there are still goods and sectors that are excluded and not subject to tax reduction, ensuring that the target is easy to achieve and creating convenience for taxpayers at the same time.

While some opinions suggest that the expansion of tax reductions should be carefully considered, the Economic and Financial Committee also said that there is a view that a review should be considered for some products affected by the trade war and the US's reciprocal tax policy.

In addition, there are opinions that there are only 3 groups of goods and services proposed not to reduce tax, so it is recommended that the Ministry of Finance review, in case the difference in 2% VAT collection for these groups of goods and services is not too large, it is possible to consider reducing tax for all goods and services, ensuring fairness.

Source: https://baohatinh.vn/chinh-phu-de-xuat-giam-2-thue-vat-den-het-nam-2026-post287712.html