The Government has proposed extending the cut in value-added tax (VAT) from 10% to 8% on specific groups of goods and services. — Photo courtesy of baodautu.vn

The Government has proposed extending the cut in value-added tax (VAT) from 10% to 8% on specific groups of goods and services from July 1 until the end of the year to support business and production activities.

In its proposal sent to the National Assembly, the Ministry of Finance held that it is necessary to study and propose relevant measures for 2024, including extending the 2% reduction in VAT, the payment deadline for corporate income tax, special consumption tax and personal income tax, and reduction of several fees and land rental, which were applied in 2023.

With the 2% tax cut in the second half of the year, the State budget will be slashed by some VNĐ24 trillion (nearly USD994.7 million), or around VNĐ4 trillion per month.

The tax incentive reduced the government revenues by more than VNĐ23.48 trillion in H1.

Highlighting the formidable challenges to the economy brought by the COVID-19 pandemic, climate change and natural disasters, the Government said that a wide range of financial measures were implemented during 2020-2023, worth some VNĐ700 trillion, to prop up the economy. — VNS