2025.06.1704:36:09UTC+00Vietnam Extends VAT Cut Until End-2026

Vietnam's National Assembly, the legislative authority of the nation, approved a resolution on Tuesday to continue the reduced value-added tax (VAT) rate until the end of next year, as reported by Reuters citing state media. Originally, in early 2022, Vietnam lowered its VAT rate from 10% to 8% to bolster economic recovery post-COVID-19, and this reduction has been renewed multiple times. The reduced tax rate is applicable to a majority of goods and services, with the notable exceptions of telecommunications, financial services, insurance, real estate, stock trading, and metal products, as detailed by the Vietnam News Agency. Extending this tax cut is anticipated to result in a revenue loss of approximately 121.74 trillion dong ($4.7 billion) from July through the conclusion of next year, according to a document from the Finance Ministry. While Vietnam's Gross Domestic Product (GDP) growth was at 6.93% year-over-year in the first quarter of 2025, down from a 7.55% increase in the last quarter of 2024, it still records the highest first-quarter growth rate since 2020, although displaying a slight deceleration since the first quarter of 2024, per preliminary data.