Vietnam finance ministry suggests 2 ppt VAT reduction till end-2026
Vietnam’s Ministry of Finance has suggested the National Assembly extend the two-percentage-point reduction in value added tax (VAT) until end-2026.
The latest reduction was made in November 2024, as the National Assembly, Vietnam’s highest legislative body, reduced the tax from 10% to 8% until June 30, 2025.
At a supermarket in Ho Chi Minh City. Photo courtesy of Thanh Nien (Young People) newspaper.
For the latest proposal, the Ministry of Finance made similar recommendations of decreasing the tax for goods and services, which are currently subject to 10% VAT.
They do not include goods and services in the telecom, real estate, securities, insurance, banking and mining sectors.
The ministry clarified that the tax reduction would follow similar moves since 2022, which aimed to boost economic growth and consumption, while making no changes to Vietnam’s international commitments.
The VAT changes are worth VND39.54 trillion ($1.54 billion) in H2/2025 and VND82.2 trillion in 2026, the ministry noted. In January-February 2025, the VAT cut led to VAT revenues going down VND8.3 trillion ($323.7 million), the ministry added.
Nevertheless, the finance ministry strives to increase the budget collection this year by 10% year-on-year, by applying digitalization in tax collection to improve the results.
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