Vietnam says it is considering lowering value-added tax (VAT) from 10 per cent to eight per cent for some goods and services to boost the economy.

This was disclosed in local media on Tuesday.

One of two options considered is slashing two per cent off the current 10 per cent VAT on some goods and services, local newspaper Vietnam News reported, citing the finance ministry’s tax department.

The second one slashes two per cent off the current 10 per cent VAT.

However, that would exclude goods and services already affected by a previous VAT reduction as part of a government’s policy to boost economic recovery after COVID-19.

Businesses have long been asking for additional government support to help speed up economic recovery and cope with recent difficulties.

The newspaper reported that the Ho Chi Minh City Food and Foodstuff Association said businesses had been struggling with rising interest rates, poor liquidity, increased risk in the bond and stock markets, and higher input and logistics prices.

The Vietnam Beverage Association had asked the government to extend the policy at least until the end of 2023, saying while there has been some improvement in recent months, it will take a long time for the beverage industry to fully recover after the pandemic.

According to the European Chamber of Commerce in Vietnam, VAT reduction has helped the government keep inflation in check, boost consumption, and encourage businesses to invest in expanding their operations.

Consumers have also benefited from the lower VAT, which is in line with the government’s policy to aid the population post-pandemic, according to the chamber of commerce. 

(Xinhua/NAN)