The Government proposes to continue reducing VAT by 2% until December 31, 2026

(PLVN) - The Government has just submitted to the National Assembly a proposal to continue reducing the value-added tax rate by 2% for groups of goods and services currently subject to a tax rate of 10%, except for some specific areas. The policy will be applied from July 1, 2025 to December 31, 2026 to create motivation to support businesses and people and promote economic growth.

Reduce VAT by 2% for groups of goods and services currently subject to 10% rate

On May 13, at the 9th Session, Minister of Finance Nguyen Van Thang, authorized by the Prime Minister, presented the Draft Resolution of the National Assembly on reducing value added tax (VAT).

According to the presentation, the Government proposed to continue implementing the policy of reducing VAT rate by 2% to institutionalize the socio -economic development target in 2025 with a growth target of 8% or more, contributing to creating a solid foundation to achieve double-digit growth rate in the period of 2026 - 2030.

Minister Nguyen Van Thang presents the draft resolution of the National Assembly on VAT reduction. (Photo: Quochoi.vn)

Minister of Finance Nguyen Van Thang said: The draft Resolution stipulates the scope of application including: Reducing 2% VAT rate, applied to groups of goods and services currently applying a tax rate of 10% (to 8%), except for the following groups of goods and services: Telecommunications, financial activities, banking, securities, insurance, real estate business, metal products, mining products (except coal), goods and services subject to special consumption tax (except gasoline).

The time of application of the provisions in Clause 1 of this Article is from July 1, 2025 to December 31, 2026.

According to Minister of Finance Nguyen Van Thang, in the period from 2022 to the first months of 2025, the National Assembly has resolved to reduce the VAT rate by 2% for groups of goods and services currently subject to the VAT rate of 10% (to 8%), excluding some groups of goods and services. The reduction of VAT, along with other support solutions on taxes, fees, and charges, is creating great conditions to help businesses reduce production costs, increase profits, and increase the ability to stimulate demand.

To contribute to creating momentum to promote and develop the economy and support people and businesses, the Government believes that it is necessary to continue implementing the VAT reduction policy.

According to the Ministry of Finance, if the proposed tax reduction continues, the state budget is expected to reduce revenue by about VND 121,740 billion in the last 6 months of 2025 and the whole year of 2026. However, the policy is expected to create a positive spillover effect on production and business, contributing to stabilizing the macro economy and creating more jobs.

Linked to medium-term fiscal stability goals

Presenting the Inspection report, Chairman of the Economic and Financial Committee Phan Van Mai said that the majority of opinions in the Committee agreed with the necessity of issuing a Resolution at the request of the Government.

Chairman of the Committee Phan Van Mai said the review report recorded many opinions agreeing with the necessity of issuing the Resolution. (Photo: Quochoi.vn)

However, some opinions say that continuing to propose the issuance of policies is not really appropriate and will make it difficult to achieve the set goal of stimulating consumption because the policy's ability to stimulate demand has been saturated after a long period of implementation.

In addition, the continuous extension and prolongation of the tax reduction policy creates a bad precedent, making tax policy unstable and inconsistent. In addition, the narrowing of fiscal and policy space will reduce the ability to respond to more serious economic crises in the future.

With the expected impact of reducing state budget revenue by about VND 39.54 trillion from the implementation of the VAT reduction policy but not yet included in the 2025 state budget estimate, along with newly arising state budget expenditures and other revenue reduction policies in new resolutions to be issued, newly approved projects may impact the assurance of state budget revenue and deficit estimates in 2025 as well as the construction of the 2026 budget estimate.

Regarding the scope of policy adjustment, the Standing Committee of the Economic and Financial Committee proposed 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 implement and creates convenience for taxpayers. At the same time, it is necessary to assess more carefully the impact on state budget revenue, ensuring that the implementation of the tax reduction policy is associated with the goal of medium-term fiscal stability and public debt safety, ensuring consistency with other tax policies such as environmental protection tax, special consumption tax, etc.

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 VAT collection of 2% 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.

Regarding the policy application period, Chairman of the Economic and Financial Committee Phan Van Mai said: The majority of opinions in the Economic and Financial Committee agreed with the Government's proposal to continue allowing the policy to be applied for the last 6 months of 2025 and 2026 to create favorable conditions for businesses to proactively plan production and business, contributing to supporting economic growth.

Some opinions say that the implementation of the VAT reduction policy in the past has not really had a clear impact, affecting the stability and effectiveness of the VAT Law recently passed by the National Assembly. Therefore, it is recommended to consider, if necessary, extending the policy implementation period only until the end of 2025 and promulgating it in the General Resolution of the Session.

Thanh Ha

Source: https://baophapluat.vn/chinh-phu-de-xuat-tiep-tuc-giam-2-thue-vat-den-het-31122026-post548273.html