Vietnam to extend VAT cut until mid-2024 to support economy

Vietnam’s parliament on Wednesday decided to further extend a reduction in value-added tax (VAT) on goods and services until the end of June 2024.

The VAT cut to 8% from 10%, which has been in place since early 2022, was designed to boost domestic consumption and production as the Southeast Asian country’s export-driven economy faces headwinds from slowing global demand.

Vietnam’s exports in the year to Nov. 15 fell 6.4% from a year earlier to $306 billion, government data released on Wednesday showed, as weak global demand continues to weigh on its shipments of products such as garments, smartphones and electronics.

Vietnam’s economic growth is estimated at 5% this year, below an earlier government target of 6.5% and slower than a low-base expansion of 8.02% last year.