Proposal to reduce VAT by 2% until the end of 2026

Applicable period from July 1, 2025 to December 31, 2026.

On the morning of May 13, on behalf of the Prime Minister, Minister of Finance Nguyen Van Thang submitted to the National Assembly a draft resolution on reducing value-added tax (VAT).

According to Minister Thang, in the period 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 VAT rate of 10% (to 8%), excluding some groups of goods and services.

“The solution to reduce 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,” said Mr. Thang.

Minister of Finance Nguyen Van Thang. (Photo: National Assembly Media).

According to Mr. Thang, besides the basic achievements, our country's economy still has limitations and shortcomings and continues to face many difficulties and challenges.

Growth drivers have not yet made a clear breakthrough according to growth requirements such as production and business activities still facing difficulties, production costs are still high, domestic purchasing power has improved but slowly, especially the US announced to impose reciprocal tariffs on countries, including Vietnam.

To contribute to creating momentum to promote and develop the economy, support people and businesses, promote production, business, tourism and domestic consumption in 2025 and 2026, it is necessary to continue implementing the VAT reduction policy.

Regarding the draft content, the Government proposes to reduce the VAT rate by 2% for groups of goods and services currently subject to a tax rate of 10% (to 8%).

Except for some groups of goods and services such as 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).

Regarding the impact on budget revenue, Mr. Thang said that the expected reduction in state budget revenue in the last 6 months of 2025 and the whole year of 2026 is about 121,740 billion VND (of which the last 6 months of 2025 will decrease by about 39,540 billion VND, and in 2026, it will decrease by about 82,200 billion VND).

“Reducing VAT will help reduce the cost of goods and services, thereby promoting production and business and creating more jobs for workers, contributing to stabilizing the macro economy and economic growth in the last 6 months of 2025 and the whole year of 2026,” said Mr. Thang.

Chairman of the Economic and Financial Committee Phan Van Mai. (Photo: National Assembly Media).

Examining this content, Chairman of the Economic and Financial Committee Phan Van Mai stated that the majority of opinions in the committee agreed with the necessity of issuing a resolution to continue applying the VAT reduction policy for the last 6 months of 2025 and the whole year of 2026 as proposed by the Government.

This is to support businesses to promote production and business, associated with maintaining macroeconomic stability.

In the context of the domestic economy facing many difficulties and challenges; the world economy has many unpredictable fluctuations, the continued issuance of this policy can be seen as a measure aimed at domestic consumption to promote growth, contributing to achieving the set growth target of 8%.

However, some opinions say that continuing to propose policies is not really suitable and 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.

Similarly, the constant extension and prolongation of tax reduction policies sets a bad precedent, making tax policies unstable and inconsistent.

PHAM DUY

Source: https://vtcnews.vn/de-xuat-giam-2-thue-vat-den-het-2026-ar942972.html