Vietnam’s Ministry of Finance has officially submitted a draft resolution to the National Assembly, seeking to extend the 2 percent Value-added Tax (VAT) reduction until December 31, 2026, Tuoi Tre has reported. The proposed extension applies to goods and services normally taxed at 10 percent, except for sectors such as telecoms, finance, insurance, real estate, mining (except coal), and luxury goods.
Other key points in the article include:
- The policy is expected to reduce state budget revenue by around VND 121.74 trillion or US$4.68 billion from July 2025 to end-2026, including VND 39.54 trillion or US$1.52 billion in the second half of 2025, and VND 82.2 trillion or US$3.16 billion in 2026.
- The government is arguing the reduction supports businesses by lowering costs, boosting production, and maintaining macroeconomic stability amid subdued domestic demand and global volatility.
- While most members of the National Assembly’s Economic and Financial Committee support the extension, some warn it could weaken fiscal space and set a precedent for ad hoc tax measures with limited impact on consumption.
This fits with Vietnam betting on consumption-led stimulus to meet its 8 percent growth target despite narrowing fiscal room and global headwinds.