The National Assembly has voted to extend the reduction of Value Added Tax (VAT) on certain goods and services for another 6 months. This decision, approved by nearly 95% of delegates, will maintain the 8% VAT rate until the end of the year. However, it is important to note that this tax reduction does not apply to sectors such as real estate, securities, banking, telecommunications, and others subject to special consumption tax.
Experts believe that reducing VAT will help people save money, stimulate demand, and increase consumption. However, this extension is expected to decrease budget revenue by approximately 47,500 billion VND for the whole year. The Government has been tasked with ensuring revenue sources to prevent any negative effects on budget estimates, expenditures, and urgent needs.
In addition to the VAT resolution, Vietnam Airlines has been granted an extension to repay a refinancing loan. The State Bank will provide three additional extensions for the airline’s VND4,000 billion loan, allowing a maximum of 5 years for repayment. The National Assembly emphasized the importance of restructuring Vietnam Airlines to facilitate its recovery.
Vietnam Airlines had utilized the VND4,000 billion loan package from July to December 2021 to support liquidity during the Covid-19 pandemic. The company aims to increase revenue, divest capital, and achieve a consolidated profit target in the coming year. This loan extension and financial restructuring are critical steps in ensuring the airline’s long-term sustainability.
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