MoF seeks feedback on VAT cut plan to boost economy

The Ministry of Finance is proposing reducing VAT on petrol products by 2% from July 1 to the end of 2026. (Photo: VNA)

The proposal suggests extending the 2% VAT reduction from July 1, 2025, until the end of 2026 for goods and services currently taxed at 10%, lowering them to 8%.

However, key sectors such as telecommunications, finance, banking, securities, insurance, real estate, metal products and mining (except coal) would be excluded. Goods and services subject to special consumption tax, except gasoline, are also not covered.

The draft expands the list of eligible items for VAT reduction, including washing machines, microwaves, data processing services and prefabricated metal products including barrels, tanks and boilers. Additionally, gasoline and oil are proposed to receive tax cuts due to their critical role in production, consumption and overall macroeconomic stability.

According to the MoF, reducing VAT will lower the cost of goods and services, boosting production, business expansion and help job creation. The policy is also expected to benefit consumers directly by reducing the cost of essential goods and services, thereby improving living standards.

The MoF forecasts that the proposed VAT reduction will lead to a decrease in State budget revenue of more than 121.74 trillion VND (4.8 billion USD). This includes 39.54 trillion VND in the last six months of 2025 and 82.2 trillion VND in 2026.

The ministry added that the VAT reduction policy, implemented since 2022 to aid post-pandemic recovery, has provided support worth 123.8 trillion VND over the past three years. Over the past two months of this year alone, the tax cut amounted to an estimated 8.3 trillion VND./.