A sweet stall on Hàng Giầy Street, Hà Nôi. The VAT reduction from 10 per cent to 8 per cent will continue to be in place to the end of this year. — VNA/VNS Photo Hoàng Hiếu

The Vietnamese Government on Sunday announced it will extend the policy of VAT reduction to 8 per cent to the end of this year.

Those products and services currently subject to a 10 per cent VAT tax rate will enjoy a VAT tax rate of 8 per cent from today.

The reduction is not applied to telecommunications, financial, banking, securities, insurance, real estate services, metals and minerals, refined oil and chemicals, products subject to special consumption tax and information and technology.

The VAT reduction (latest issue under Decree No 72/2024/NĐ-CP) to 8 per cent from 10 per cent, has been in place since early 2022, aimed at promoting domestic consumption and production following the COVID-19 pandemic and global slowdown.

It is estimated that the VAT reduction will reduce the Government revenues by an estimated VNĐ24 trillion (US$994.7 million) in the second half of this year.

In the first half, the State budget saw a drop of around VNĐ23.48 trillion with the VAT reduction policy in place. — VNS