VAT reduction extended till June 30, 2025

The value-added tax (VAT) shall be reduced to 8 per cent from 10 per cent in the first six months of 2025, according to Government Decree No. 180/2024/ND-CP, dated December 31, 2024.

The Government News quoted the Decree as reporting that the new tax policy shall be applied to groups of goods and services currently subject to a tax rate of 10 per cent, except for the following groups of goods and services:

- Telecommunications, financial activities, banking, securities, insurance, real estate business, metals and prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products.

- Goods and services subject to special consumption tax.

- Information technology according to the law on information technology.

As the policy is applied in the first half of 2025, it would result in a budget deficit of around VND26.1 trillion (over $1.02 billion), the Government estimated.

The 2 per cent reduction in VAT has been initially introduced since 2022 to aid economic growth following the COVID-19 pandemic.