The government looks set to maintain its 8 per cent VAT until the end of next year, as part of efforts to support businesses and consumers.The Ministry of Finance (MoF) last week issued a draft resolution on the status of VAT from July this year to December 31, 2026, which could be discussed and adopted at the ninth session of the National Assembly (NA) before the end of June.“A reduction of 2 per cent VAT shall continue for groups of goods and services currently subject to a 10 per cent rate, except for the following groups of goods and services: telecommunications, financial activities, banking activities, securities, insurance, trading of real estate, metals, mining products (excluding coal mining), and goods and services subject to excise taxes (except petrol),” read the draft resolution.At present, several groups of goods and services including IT, precast metal products, coke mining, refined oil, and chemical products are not free from this reduction.If approved, this will be the sixth time the NA has ensured an 8 per cent VAT rate since 2022, rather than the previous 10 per cent.According to the MoF, it will result in a reduction in the state budget revenue of $4.87 billion from July to the end of 2026, including $1.58 billion in the second half of this year, and $3.29 billion in the whole of 2026.In the first two months of this year, the VAT reduction is estimated to have been valued at about $332 million.The draft resolution says the rate will contribute to decreasing prices of goods and services, therefore helping production and business activities and generating more employment, while contributing to macroeconomic stability and economic growth in the latter half of 2025.Since 2022, the NA has applied an 8 per cent VAT rate on various goods and services. In 2023, similar assistance was valued at $936 million, with total goods retail and consumer service revenue climbing 9.6 per cent onyear. Last year, the same support came in at almost $2 billion, with total goods retail and consumer service revenue ascending 9 per cent on-year.According to the National Statistics Office, last year Vietnam’s GDP was estimated to have increased 7.09 per cent compared to 2023, with GDP per capita reaching $4,700. Inflation was controlled, with the average consumer price index (CPI) climbing 3.63 per cent on-year.The VAT rate has led to a decrease in the selling price of goods and services for consumers, thereby boosting production and business activities.The trade surplus was estimated at $24.77 billion, and total state budget revenue hit $13.46 billion, exceeding the estimate by 19.8 per cent and up 16.2 per cent compared to the implemented figure in 2023.In the first two months of this year, total goods retail and consumer service revenue was estimated at $45.5 billion, up 9.4 per cent on-year. The CPI index rose 3.27 per cent on-year. Total goods export and import turnover was estimated to have stood at 127.07 billion, up 12 per cent on-year, including exports up 8.4 per cent and imports up 15.9 per cent. The trade surplus came in at $1.47 billion, while total state budget revenues totalled nearly $20 billion – up 25.7 per cent on-year. (ICE HO CHI MINH CITY)

Fonte notizia: Vietnam News