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Tax: Vietnam extends 8 percent VAT cut through end-2026

Vietnam’s National Assembly has approved a reduction in the value-added tax (VAT) rate from 10 percent to 8 percent for most goods and services, effective from July 1, 2025 to December 31, 2026, in a move aimed at stimulating economic activity, The Investor has reported→view source.

Key details:

  • Effective period: July 2025 to December 2026
  • Expanded coverage: Now includes transportation, logistics, and IT products and services
  • Exclusions: No VAT reduction for telecommunications, finance, banking, securities, insurance, real estate, metal and mineral products (except coal), and items under special consumption tax (except gasoline)
  • Budget impact: VND 39.54 trillion (US$1.52 billion) loss in H2 2025; VND 82.2 trillion (US$3.15 billion) loss in 2026

The VAT cut is part of a broader fiscal strategy to support domestic businesses and consumers during a period of uncertain economic recovery. Although it reduces short-term revenue, the government expects the policy to boost production, investment, and spending.

See also: Tax in Vietnam

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