People shop at a supermarket in Go Vap district of HCMC, June 2023. Photo by VnExpress/Thanh Tung
The reduction in value-added tax from 10% to 8% will remain in effect until the first half of next year for most industries, according to a new government decree.
Telecommunications, financial and banking sectors, securities, insurance, real estate, metals and metal products as well as mining (excluding coal) will not benefit from the tax reduction.
Businesses calculating tax using the direct method, where VAT is calculated as a percentage of their revenue, will benefit from a 20% reduction on the tax rate used when issuing invoices.
The government had asked the Finance Ministry to review and extend the two-point VAT cut until mid-2024 instead of letting it expire at the end of this year, saying it would support businesses and consumers in a context of economic slowdown and unpredictable global developments.
The reduction came into effect on July 1 of this year.
As VAT is shared by businesses and consumers, both groups benefit from the reduction.