Vietnam said it was considering lowering value-added tax (VAT) from 10 per cent to 8 per cent for a number of goods and services to boost the economy, local media reported on Tuesday.
One of two options considered being is slashing 2 per cent off the current 10 per cent VAT on a number of goods and services, local newspaper Vietnam News reported, citing the Ministry of Finance’s tax department.
The second one is also slashing 2 per cent off the current 10 per cent VAT but that would exclude goods and services that were already under the effect of a previous VAT reduction as part of a government’s policy to boost economic recovery after COVID-19.
Businesses have been long asking for additional support from the government to help speed up economic recovery and to cope with recent difficulties.
The Ho Chi Minh City Food and Foodstuff Association said businesses had been struggling with rising interest rates, poor liquidity, increased risk in the bond and stock markets and higher input and logistics prices, the newspaper reported.
The Vietnam Beverage Association had asked the government to extend the policy at least until the end of 2023, saying while there has been some improvement in recent months it will take a long time for the beverage industry to fully recover after the pandemic
According to the European Chamber of Commerce in Vietnam, VAT reduction has helped with the government’s efforts in keeping inflation in check, boosting consumption, and encouraging businesses to invest in expanding their operations.
Consumers have also benefited from the lower VAT, which is in line with the government’s policy to aid the population post-pandemic, it said.
