The Vietnamese government issued Resolution No. 218/NQ-CP on 12 November 2024, instructing the Ministry of Finance to propose policies for tax reductions, including an extension of the VAT cut into the first half of 2025.
The proposed plan suggests reducing the VAT rate by 2% for certain goods and services currently taxed at 10%, with exclusions for sectors like telecommunications, banking, real estate, and mining. The proposal is in line with the country’s 5-year socio-economic development plan.
This extension would build on previous VAT reductions and aims to stimulate business growth, lower costs, and promote job creation. The reduction is expected to cut government revenue by around VND 25,000 billion but is seen as a necessary step to support the economy’s recovery and meet long-term development goals.
If approved, this would mark the fifth time Vietnam has reduced VAT in recent years as part of its efforts to drive economic growth and consumption amid ongoing challenges.
