The National Assembly has agreed to apply a 2 per cent reduction to the VAT rate in the first half of 2024 following a resolution on the socio-economic development plan for next year, which was approved by the legislature on November 29.

The 2 per cent reduction is applicable to products and services subject to a 10 per cent rate, with exceptions on three groups of products and services - Group 1: telecommunications, financial activities, banking, securities, insurance, real estate business, metals and prefabricated products, mining products (excluding coal mining), coke coal, refined petroleum, and chemical products; Group 2: goods and services subject to special consumption taxes; and Group 3: information technology under information technology laws.

The Ministry of Finance estimated that the reduction will cost the State budget VND25 trillion (over $1 billion).

In June, 2023, the NA also agreed to a 2 per cent reduction of the VAT rate in the second half of the year, from July 1 to December 31, 2023.