VINACHEM

The Government has decided to continue its value-added tax reduction until December 31, 2024 as part of measures to support economic growth.

The Government promulgated Decree No. 72/2024/ND-CP, dated June 30, 2024 on extending the ongoing value-added tax (VAT) reduction from 10 percent to 8 percent on specific groups of goods and services.

The following goods and services shall not be entitled to VAT reduction policy:

Telecommunications, financial-banking activities, securities, insurance, real estate business, metals and fabricated metal products, mining products (excluding coal mining), coke, refined oil, chemical products as prescribed in Appendix I issued with this Decree.

Products and services subject to special consumption tax as prescribed in in Appendix II issued with this Decree.

Information technology according to information technology legislation as prescribed in Appendix III issued with this Decree.

The new decree takes effect from July 1 to December 31, 2024.

With the 2 percent tax cut in the second half of the year, the State budget will be slashed by some VND24 trillion (nearly US$994.7 million), or around VND4 trillion per month, according to the Ministry of Finance.

The VAT cut has been put in place in Viet Nam since 2022, aiming to remove bottlenecks for enterprises and prop up their business activities./.   – VGP –