Government proposes 2% VAT reduction until the end of 2026

The Government has proposed to cut 2% of the value-added tax (VAT) for goods and services currently taxed at 10% from July 1, 2025 to December 31,2026.

The proposal was presented by Minister of Finance Nguyen Van Thang during the ongoing National Assembly (NA) session.

The VAT reduction will not apply to sectors including telecommunications, financial services, banking, insurance, securities, real estate, metal products, mining (excluding coal) and items subject to special consumption tax (except for gasoline), according to the proposal.

Additionally, the State has proposed adding gasoline, washing machines, and microwave ovens to the list of goods eligible for the VAT reduction.

The Ministry of Finance has projected that the reduction will lead to a decrease in state revenue by approximately VND121.74 trillion ($4.69 billion) over the proposed period.