New impetus for economic recovery and growth

The National Assembly has just passed a Resolution on reducing the value added tax rate by 2% for a number of groups of goods and services. Notably, the application period this time will last for 18 months, from July 1, 2025 to December 31, 2026, instead of just 6 months as in previous years. This is considered a decisive step, clearly demonstrating the spirit of supporting recovery and promoting sustainable economic growth after many difficult years.

The 2% reduction in value added tax has helped encourage people to shop more. Photo: VIET AN

From short-term policy to long-term move

Since 2022, the National Assembly has passed 5 resolutions to reduce value-added tax (VAT) from 10% to 8% for many types of goods and services to support businesses and consumers. However, each previous resolution was only effective for 6 months, providing short-term, phased support. Therefore, in this latest adjustment, extending the tax reduction period by 3 times - 18 months - not only demonstrates the determination to provide substantial support but also creates conditions for economic entities to develop more stable production and business plans. Especially in the context of the global economy remaining unstable, the supply chain has not fully recovered, demand is weak and businesses continue to face the pressure of increasing production costs.

According to the new resolution, groups of goods and services subject to a tax rate of 10% will be reduced to 8%, except for some fields such as telecommunications, finance - banking, insurance, real estate, mining products (except coal), goods subject to special consumption tax (except gasoline)... The policy will be applied from July 1, 2025 to December 31, 2026.

Finance Minister Nguyen Van Thang said that this tax reduction policy is expected to reduce budget revenue by about VND39,540 billion in the last 6 months of 2025, and VND82,200 billion in 2026. However, this is a necessary policy expenditure, because its spillover effect can create larger revenue sources thanks to expanding the scale of production, consumption and GDP growth.

Highly appreciating the National Assembly 's decision, many economic experts believe that the policy of reducing VAT by 2% for 18 months is completely suitable for the current context, especially when the business community is struggling to cope with adverse external fluctuations such as financial instability, rising raw material prices, and declining global demand... The National Assembly and the Government's decision to extend the tax reduction period this time not only has financial significance but also helps businesses have enough time to plan investments, restructure production, and restore business operations.

Creating resilience for the economy

In Phu Yen , the business community responded positively to the above VAT reduction policy and said that this is a very positive signal in the context of the market still facing many difficulties. Mr. Tran Quoc Dung, Director of Binh Minh Garment Company Limited (Phu Hoa district) shared: "Extending the tax reduction period to 18 months helps businesses have more basis to recalculate financial plans, balance investment, production and adjust product prices reasonably". According to Mr. Dung, the 2% VAT reduction is not large, but accumulated throughout the entire supply chain - from raw materials, transportation to consumption - will create a positive impact on product prices, increasing domestic competitiveness, especially for small and medium enterprises.

According to economic experts, the VAT reduction policy will be a lever to promote business development, restore cash flow, thereby contributing positively to the budget; at the same time, aiming for an economic growth target of 8% or more in 2025, creating a solid foundation for a period of double-digit growth from 2026-2030.

Mr. Nguyen Tan Thuan, Permanent Vice Chairman in charge of the Provincial Business Association, Deputy General Director of Phu Yen Water Supply and Sewerage Joint Stock Company said: “The business community strongly agrees and welcomes this VAT reduction policy because it will help businesses reduce financial pressure and have more room to adjust their selling prices to be more competitive. When the selling price is at a reasonable level, consumers will spend more, helping businesses expand market share, improve cash flow and reinvest. More importantly, we see the State's support for businesses, especially in a period when the world market is still full of unpredictable fluctuations.”

Many business representatives also believe that reducing VAT will not only reduce costs for businesses but also help reduce consumer spending, thereby creating more market demand, stimulating production and promoting economic growth. While domestic purchasing power is being affected by psychological inflation and the trend of tightening spending, this policy will be an effective "push" to help the market recover.

Source: https://baophuyen.vn/kinh-te/202506/dong-luc-moi-thuc-day-phuc-hoi-va-tang-truong-kinh-te-0a80fae/