Vietnamese government might increase value added tax rate

The Vietnamese Finance Ministry has reportedly proposed to increase the value added tax (VAT) rate from the current rate of 10 per cent. The Ministry is looking at two possibilities: first was to implement the new rate of 12 per cent starting 1 January 2019, and second was to progressively lifting the rate by 2 per cent on 1 January 2018 and another 2 per cent by 1 January 2021. The number one was highly recommended, the Ministry said.

The proposal also calls for an exclusion of several business entities that were previously exempted from value added tax including those in the agriculture sector such as fertiliser manufacturers, machinery and equipment for agriculture sector and marines.

Market is monitoring the progress of the implementation of the new VAT rate. However, at the moment, there are no official confirmation on whether the changes would be materialised and the time of the implementation.