Vietnamese lawmakers say 'no' to VAT reduction for real estate, banking sectors

By Huong Dung
Sat, May 13, 2023 | 7:19 pm GMT+7

The Standing Committee of the National Assembly, Vietnam's legislative body, has disagreed with the government's proposal to reduce value added tax (VAT) for the banking, securities, real estate, and insurance sectors.

At a working session on Saturday, the committee said VAT should be cut from 10% to 8%, but not applicable to the four sectors, like what was done in 2022.

The government had proposed a VAT reduction from 10% to 8% for all goods and services, effective until the end of 2023, to help businesses recover from the pandemic.

In addition, business establishments, including households and individuals, will enjoy a 20% cut in the percentage of goods for VAT calculation when issuing invoices for all goods and services subject to this tax, Minister of Finance Ho Duc Phoc said while presenting the proposal.

The Ministry of Finance estimates budget losses of VND5.8 trillion ($247 million) per month and VND35 trillion ($1.49 billion) in the last six months of this year if the tax is cut.

National Assembly Chairman Vuong Dinh Hue (middle) oversees the NA Standing Committee's working session on May 13, 2023. Photo courtesy of the government portal.

National Assembly Chairman Vuong Dinh Hue (middle) oversees the NA Standing Committee's working session on May 13, 2023. Photo courtesy of the government portal.

Nguyen Van Chi, vice chairperson of the National Assembly's (NA) Finance and Budget Committee, said that her committee does not agree with a 2-percentage-point VAT reduction for all goods and services.

The VAT reduction should be the same as last year under the NA’s Resolution 43 dated January 11, 2022 which stated that the securities, real estate, banking, and insurance sectors are not included in the list of beneficiaries to a 2-percentage-point VAT cut.

“This approach would result in a reduction of approximately VND9 trillion ($383.6 million) in budget losses as compared to the option of easing the tax for all goods and services,” Chi said.

Speaking at the event, NA Chairman Vuong Dinh Hue said that the tax reduction should be applied to specific goods and services as stated in Resolution 43, as it was carefully evaluated and is conducive to the government's policy implementation. The policy would be effective from July 1 to December 31, 2023.

He noted that the tax reduction should not lead to a decrease in revenue and increase budget overspending this year in order to ensure the national financial safety.

"Lowering VAT is to stimulate consumer demand and benefit people and businesses, but it should not reduce the budget. If the tax reduction affects budget targets, the National Assembly will not agree," he opined.

Echoing the top legislator’s view, chairman of the NA’s Economic Committee Vu Hong Thanh asked for careful consideration of VAT reduction for all goods and services, expressing concerns over budget deficit.

In conclusion, the NA Standing Committee agreed to include the VAT reduction proposal in the legislature’s law and ordinance building program for 2023, which will be submitted to the legislative body for consideration during its fifth session, scheduled to open on May 22.

Comments (0)
  • Read More
FDI firms in Vietnam concerned about losses if FIT rates are recalculated

FDI firms in Vietnam concerned about losses if FIT rates are recalculated

A possible reduction in the feed-in-tariff (FIT) has raised concerns among foreign solar power investors about the risk of losing their capital and exiting the Vietnamese market.

Energy - Mon, March 31, 2025 | 8:00 am GMT+7

Industrial heavyweight Gelex seeks foreign partners for subsidiaries

Industrial heavyweight Gelex seeks foreign partners for subsidiaries

Gelex Group JSC (HoSE: GEX), a leading industrial corporation in Vietnam, is seeking foreign partners for its subsidiaries to promote sustainable growth and expand globally.

Companies - Mon, March 31, 2025 | 8:00 am GMT+7

Vietnam GDP grows nearly 7% in Q1: Prime Minister

Vietnam GDP grows nearly 7% in Q1: Prime Minister

Vietnam's economic growth reached nearly 7% in the first quarter, higher than the 5.66% recorded in Q1/2024, according to Prime Minister Pham Minh Chinh.

Economy - Sun, March 30, 2025 | 3:44 pm GMT+7

Phu Quoc remains hot topic in international media

Phu Quoc remains hot topic in international media

After skyrocketing to fame in 2024, Phu Quoc shows no signs of slowing down in early 2025, as it continues to be recognized by prestigious travel magazines and media outlets worldwide.

Travel - Sun, March 30, 2025 | 2:39 pm GMT+7

Vietnam manufacturing hub Dong Nai province approves planning for $3 bln urban area project

Vietnam manufacturing hub Dong Nai province approves planning for $3 bln urban area project

Dong Nai authorities on Thursday issued a decision on making a 1:500 detailed planning scheme for the over VND72.2 trillion ($2.82 billion) Hiep Hoa Urban Area project, the largest ever in the southern Vietnam province.

Southeast Asia - Sun, March 30, 2025 | 2:20 pm GMT+7

Agentic AI is poised to revolutionize industries: RMIT lecturer

Agentic AI is poised to revolutionize industries: RMIT lecturer

In healthcare, Agentic AI can monitor patient health metrics in real-time, identifying potential complications before they become critical and recommending preventive measures, writes Dr Thuy Nguyen, senior lecturer, artificial intelligence, school of science, engineering & technology, RMIT Vietnam.

Consulting - Sun, March 30, 2025 | 2:06 pm GMT+7

Vietnam PM requests completion of North-South Expressway by year-end

Vietnam PM requests completion of North-South Expressway by year-end

Prime Minister Pham Minh Chinh has requested the completion of the North-South Expressway from the northern mountainous province of Cao Bang to the southernmost province of Ca Mau by this year’s end.

Southeast Asia - Sun, March 30, 2025 | 1:56 pm GMT+7

Ample room to float Vietnam’s shipbuilding industry

Ample room to float Vietnam’s shipbuilding industry

As domestic and global demand for new ships continues to rise, Vietnam's shipbuilding industry has significant potential for growth.

Southeast Asia - Sun, March 30, 2025 | 1:50 pm GMT+7

First charter flight from Iran lands in Hanoi, boosting tourism ties

First charter flight from Iran lands in Hanoi, boosting tourism ties

Hanoi welcomed more than 200 Iranian tourists on Friday aboard the first-ever charter flight from the West Asian nation.

Travel - Sun, March 30, 2025 | 1:44 pm GMT+7

Vietnam’s garment-textile industry stitching greener, smarter future

Vietnam’s garment-textile industry stitching greener, smarter future

Vietnam, the world’s second largest garment-textile exporter, is betting on green fabric to cement its place in the global supply chain.

Southeast Asia - Sun, March 30, 2025 | 1:41 pm GMT+7

Vietnam's Vinafreight expects 47% decline in 2025 profit amid shipping cost slump

Vietnam's Vinafreight expects 47% decline in 2025 profit amid shipping cost slump

Vinafreight, a leading logistics service provider in Vietnam, expects its pre-tax profit to decline by 47% from last year due to a slump in air and sea freight rates.

Companies - Sun, March 30, 2025 | 9:54 am GMT+7

Brazil to import more products from Vietnam: President

Brazil to import more products from Vietnam: President

Brazil will import more products from Vietnam than other traditional partners in the coming time, said visiting Brazilian President Luiz Inácio Lula da Silva.

Economy - Sun, March 30, 2025 | 8:17 am GMT+7

Vietnam to have 34 cities, provinces, instead of 63: Party chief 

Vietnam to have 34 cities, provinces, instead of 63: Party chief 

Vietnam plans to reduce the number of cities and provinces from the current 63 to 34, as part of a scheme to streamline its administrative apparatus, Party General Secretary To Lam said Friday.

Politics - Sat, March 29, 2025 | 4:18 pm GMT+7

Thailand’s digital ad spending predicted to grow 10% in 2025

Thailand’s digital ad spending predicted to grow 10% in 2025

Thailand’s online advertising spending in 2025 is forecast to grow 10% to THB35 billion (over $1 billion), based on a gradual rebound of the local economy and intense competition in the digital industry, according to the Digital Advertising Association of Thailand (DAAT).

Southeast Asia - Sat, March 29, 2025 | 3:39 pm GMT+7

US Defence Secretary reaffirms alliance commitment during visit to Philippines

US Defence Secretary reaffirms alliance commitment during visit to Philippines

U.S. Secretary of Defence Pete Hegseth reaffirmed Washington’s strong commitment to its alliance with the Philippines during his official visit to the Southeast Asian country on Friday.

Southeast Asia - Sat, March 29, 2025 | 3:32 pm GMT+7

Southern Vietnam province Tra Vinh okays five more wind power projects

Southern Vietnam province Tra Vinh okays five more wind power projects

Vietnam's southern coastal province of Tra Vinh has granted in-principle approvals for five wind power plant projects, with a total investment of over VND 13.8 trillion ($540 million).

Southeast Asia - Sat, March 29, 2025 | 3:29 pm GMT+7