Vietnam’s National Assembly has approved an extension of the 2 percent Value Added Tax reduction until the end of the year. The extended tax cut is expected to save consumers and businesses roughly VND 4 trillion or US$157 million a month between now and the end of December.
The VAT is normally 10 percent, however, it was reduced during COVID as an economic stimulus measure to 8 percent. But Vietnam’s economic recovery was in large part thwarted, much like in many other countries, by the Ukraine War and the rising fuel prices that came with it. This has led to extensions of the aforementioned VAT cut for the better part of the last four years.
Vietnam’s Value Added Tax or VAT is an indirect tax applied to most goods at the point of purchase in Vietnam. It is outlined in the Law on Value Added Tax which was first passed in 2008 but has been subsequently amended several times. This information is pulled from the aforementioned law and Circular 219 that was issued at the end of 2013.