The Government has proposed the National Assembly (NA) consider a 2 per cent reduction in the value-added tax (VAT) on goods and services subject to a 10 per cent VAT during its coming meeting slated to start on May 22.

The Ministry of Finance and Ministry of Justice were asked to complete the proposed draft resolution.

Last month, the Government agreed with the Ministry of Finance’s proposal on a plan to reduce taxes, fees, and charges for 2023, which suggested the reduction.

In its proposal submitted to the PM on April 14, the ministry suggested a VAT reduction from 10 per cent to 8 per cent for several goods and services, along with a 20 per cent cut in the percentage of goods for VAT calculation for business establishments (including business households and individuals) when issuing invoices for all goods and services subject to the VAT.

The ministry suggested that the policy, which is expected to boost the economy, should be applied until December 31.

According to the Ministry of Finance, if VAT is reduced by 2 per cent for all goods and services within six months, the total tax reduction will be about VND35 trillion (US$1.5 billion) in support of people and businesses to overcome difficult times.

The Ministry of Finance has announced that it will work together with relevant ministries, branches, and localities to manage State budget estimates effectively and address the short-term impacts on State budget revenue. To achieve this, the ministry plans to coordinate efforts toward implementing tax laws more effectively, reforming and modernising the tax system and simplifying administrative procedures.

Additionally, the ministry will focus on managing State budget revenue in a rigorous manner, with emphasis on timely and effective implementation of solutions to combat revenue loss, transfer pricing and tax evasion. — VNS