Update: 11:45 | 12/01/2022
The National Assembly has approved an economic stimulus package that involves cutting value added tax by 2 percentage points and pumping VND176 trillion ($7.75 billion) into development.
A value added tax of 8 percent instead of 10 percent will be applied to goods and services this year, according to a decree issued Tuesday after 85 percent of lawmakers voted in its favor.
Customers shop in a mall in Ho Chi Minh City on November 26, 2021.
The reduction in VAT will stimulate demand and help businesses recover faster, said chairman of the National Assembly’s Economic Committee Vu Hong Thanh.
The government will spend VND176 trillion this year and the next for "investment and development", with particular focus on the healthcare system and incentive loans.
It will allocate around VND40 trillion to lower loan interest rates by 2 percentage points a year for some sectors and businesses deemed capable of recovery and repayment.
Lawmakers also approved the government increasing its overspending over GDP ratio to 1-1.2 percent a year, setting a cap of VND240 trillion.