Expanding many product groups to receive 2% VAT reduction

DNVN - The Government has just proposed to continue reducing 2% of value added tax (VAT) on goods and services currently subject to a tax rate of 10%, while expanding some groups of goods compared to the previous period, in order to support businesses and stimulate consumption in the context of many economic difficulties.

According to the proposal presented by Finance Minister Nguyen Van Thang, authorized by the Prime Minister, to the National Assembly on May 13, this VAT reduction policy will add a number of product groups to the list of preferential treatment. Specifically, the Government proposes to reduce VAT on information technology products and services; prefabricated metal products; coke; refined petroleum; chemical products; coal in the import and trade stages; as well as gasoline and oil.

These are items that were previously excluded in previous VAT reduction periods, but are now included in the proposed reduction to create a spillover effect, promote production and business and support growth.

The tax reduction policy is expected to last for the last 6 months of 2025 and the whole year of 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 VAT will directly reduce people's costs in consuming goods and services. At the same time, it will help businesses reduce production costs, lower product prices, and increase the competitiveness of their products.

The Government has proposed a 2% VAT reduction for many more product groups, including information technology products and services.

The National Assembly's Economic and Financial Committee said that the majority of opinions in the committee agreed with the Government's proposal. Delegates assessed that expanding the scope of tax reduction is necessary to support businesses and consumers, while contributing to macroeconomic stability and promoting economic growth.

However, the audit agency also suggested that the Government should more fully assess the impact of the policy on state budget revenue, while ensuring consistency with other tax policies such as environmental protection tax, special consumption tax, etc. to maintain medium-term fiscal stability and public debt safety.

Along with the proposal to reduce VAT, the Government also proposed to extend the exemption period for agricultural land use tax until December 31, 2030. According to assessments, this policy has brought many positive effects over the past two decades, helping to reduce difficulties for farmers, encourage investment and promote sustainable agricultural development.

In the 2021-2023 period alone, the state budget will exempt about VND 7,500 billion in agricultural land use tax each year. This is considered part of a major policy to implement the Party and State's policies on agricultural, farmer, and rural development.

The Economic and Financial Committee agreed with this proposal, but at the same time suggested that the Government should review and not apply tax exemption to cases of land left fallow or used for purposes other than agricultural purposes.

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Source: https://doanhnghiepvn.vn/kinh-te/chinh-sach/mo-rong-nhieu-nhom-hang-duoc-giam-2-thue-vat/20250513033459055