Vietnam plans no VAT cuts for banking, property sectors
The Standing Committee of the National Assembly, a key committee of Vietnam’s parliament, told a meeting last weekend that the government’s proposal to lower the VAT to 8 percent from 10 percent would include all goods and services but exclude the banking and real estate sectors among others. The property market contributes to about 15 percent of Vietnam’s…
HANOI, May 16 (Xinhua) — As Vietnam is ready to extend a cut to value-added tax (VAT) in a move to boost the flagging economy, lawmakers will not support a reduction for the banking, securities, real estate, and insurance sectors, online newspaper VnExpress reported on Tuesday.
The Standing Committee of the National Assembly, a key committee of Vietnam’s parliament, told a meeting last weekend that the government’s proposal to lower the VAT to 8 percent from 10 percent would include all goods and services but exclude the banking and real estate sectors among others.
The property market contributes to about 15 percent of Vietnam’s GDP and has been a drag on growth since last year amid a lack of mortgage availability, high-interest rates and a stagnant corporate bond market, according to the Vietnam National Real Estate Association.
The Vietnamese government has taken several measures to revive the real estate sector. However, industry experts forecast the market would stay faltered until the end of 2024.
The call for another round of VAT cuts comes just four months after the ending of the previous one as Vietnam’s export-driven economy has been hit hard by slowing global demand.
Vietnam’s economic growth slowed to 3.32 percent in the first quarter, compared to a 5.92 percent year-on-year expansion in the fourth quarter of 2022, according to the General Statistics Office.
Its total exports in the January-April period dwindled 11.8 percent from a year earlier to 108.6 billion U.S. dollars, the statistics showed.
Upon the parliament’s approval, the tax cut, scheduled to be effective for six months starting from June, would translate into 35 trillion dong (1.48 billion U.S. dollars) in lost tax revenues, the government said. Enditem
