VAT cuts from 10% to 8%
VGP – Value added tax (VAT) for services and goods shall be cut from current 10 percent to 8 percent. applicable since February 1 as part of a stimulus program for businesses.
Value added tax (VAT) for services and goods will be cut from 10% to 8%, beginning from February 1, 2022
The regulation is part of the Government’s Decree No. 15 on tax reduction in accordance with the National Assembly’s Resolution 43/2022 on financial and monetary policies supporting the Program for Socio-economic Recovery and Development.
A majority of firms would be eligible for the VAT cut with the exceptions of firms in the fields of telecommunications, banking and finance, property development, mining and metallurgy, refinery and petrochemicals, chemical products, goods, and services subject to excise tax.
The Government also assigned the ministries, localities, and agencies to instruct, inspect, supervise, and stabilize supply and demand of goods and services from February 1 to the end of 2022 so that consumers could benefit from the VAT reduction.
The new policy is expected to slash about VND 51.4 trillion of budget collection (US$2.2 billion) including US$ 2.17 billion of tax break for businesses and VND 2 trillion of taxable corporate income exemption for donations and sponsors made by enterprises and organizations for COVID-19 epidemic control operation in Viet Nam.
The tax break is expected to help businesses, organizations and people overcome difficulties due to the impact of the pandemic, thereby recovering and developing production and business.
In addition, the policy also aims to stimulus consumption and investment, thereby contributing to the recovery of the economy in the post-pandemic period and implementation of social welfare./.
