Confirmation – COVID-19 economic fallout leads to 2% VAT cut
Vietnam’s government has won the backing on 28 January from the National Assembly to cut VAT from 10% to 8% on a range of services to help stimulate the economy which is struggling with COVID-19 disruption. In the last quarter of 2021, the country reduce the VAT rate on tourism and other sectors by 30% to 7%.
The new rate will apply between 1 February and 31 December 2022.
The sectors to benefit: aviation, transport, tourism, accommodation, catering services, education and training, agriculture, processing and manufacturing, and social housing. Certain supplies will be excluded, including: IT; production and mining; real estate; chemicals; and financial services. Any special consumption taxes will remain at full rate. The rate changes will apply likely from February 2022 until the end of the year.
The country’s economic growth has now dropped to just above 5%.
The draft resolution on the program for socioeconomic recovery will be presented at the first extraordinary meeting of the 15th National Assembly today, January 4.
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