The Government approves the proposal to reduce VAT rate from 1 July to 31 December 2024

On May 28, 2024, the Government issued Resolution 81/NQ-CP, proposing the development of a National Assembly resolution to reduce VAT.

Accordingly, the Government approved the Ministry of Finance's proposal in Submission 116/TTr-BTC and tasked the Minister of Justice, authorized by the Prime Minister, to sign the government's submission on May 28, 2024. This submission will be reported to the National Assembly and the National Assembly Standing Committee to include the VAT reduction resolution in the 2024 legislative program and allow it to be processed under expedited procedures, to be approved at the 7th session of the 15th National Assembly.

Previously, the Ministry of Finance officially issued a draft resolution to reduce VAT from July 1, 2024, to December 31, 2024.

Article 1 of the draft resolution proposes the following:

• A 2% reduction in VAT, applied to goods and services currently subject to a 10% tax rate (down to 8%), except for certain goods and services: telecommunications, information technology, financial activities, banking, securities, insurance, real estate business, metal production and metal product manufacturing, mining (excluding coal mining), coke and refined petroleum production, chemical and chemical product manufacturing, and goods and services subject to special consumption tax.  

• The 2% VAT reduction will be effective from July 1, 2024, to December 31, 2024.

Thus, the resolution to reduce VAT by 2% is expected to be approved at the 7th session of the 15th National Assembly.

The 7th session will be conducted in two phases: from May 20 to June 8, and from June 17 to the morning of June 28, totaling 26.5 working days.

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