VAT reduction until mid-year

Some goods and services continue to have a 2% value-added tax (VAT) reduction until June 30, according to Decree 180 recently issued by the Government .

Similar to previous times, the 2% reduction in VAT is applied to a number of groups of goods and services subject to a tax rate of 10%. Sectors not eligible for the reduction include real estate, securities, banking services, telecommunications, information technology, coke, chemical products, goods and services subject to special consumption tax.

The reduction of value added tax for each type of goods and services is applied uniformly at the stages of import, production, processing, and commercial business.

Business establishments that calculate VAT using the deduction method are subject to a tax rate of 8% on goods and services. Business establishments (including business households and individual businesses) that calculate VAT using the percentage method on revenue are entitled to a 20% reduction in the percentage rate used to calculate tax when issuing invoices for goods and services eligible for the reduction.

People shop at a shopping mall on Dong Khoi Street, Ho Chi Minh City on November 29, 2024 Photo: Quynh Tran

According to the Ministry of Finance , extending the VAT reduction period until the end of June is expected to reduce budget revenue by about VND25,000 billion (equivalent to VND4,175 billion per month). Of which, the domestic revenue reduction is expected to be VND2,500 billion per month and the import revenue is expected to be about VND1,500 billion.

However, a 2% reduction in VAT will help people save on spending and living expenses, thereby stimulating demand and increasing consumption, according to experts. The Ministry of Finance also believes that this will help production and business recover soon, thereby contributing back to the state budget and the economy .

The VAT reduction policy has been implemented since 2022 to support people and businesses to recover after Covid-19. Unlike other taxes, VAT has the characteristic of sharing the tax burden between businesses and consumers, so when reduced, both groups will benefit. Over the past three years, the value of support from this policy has reached VND 123,800 billion.

Source: https://baoquangninh.vn/giam-tiep-thue-vat-den-giua-nam-nay-3337572.html