Vietnam Considers Continuing VAT Reduction In 2024

Recently, during a meeting between the Government's Standing Committee and representatives of Vietnamese entrepreneurs, the Deputy Minister of Finance announced that the Ministry of Finance is currently reviewing and reporting to the Government the plan to continue reducing VAT in 2024 following the trend set in 2023.

Given the economic challenges in 2023, where businesses and citizens limited spending, leading to slow economic growth and negative consequences such as layoffs, restricted expansions, reduced borrowing, Vietnam is facing the risk of deflation if support policies for economic development are not extended.

Financial data revealed that contributions from three economic sectors, namely state-owned enterprises, foreign direct investment, and private enterprises, account for 52-55% of the budget revenue. Considering total revenue including oil, this percentage ranges from 43-46%.