Vietnam Extends Tax Relief to Support Economy, Curb Inflation

Vietnam's government has decided to extend key tax relief measures to bolster the domestic economy and curb inflationary pressures. This move aims to support industries amidst global economic uncertainties and encourage business activities. The extended measures include reductions in corporate income tax and increased deductions for personal income tax based on dependents. These are expected to alleviate the burden on businesses, particularly SMEs, and stimulate consumption and investment. For instance, taxpayers without dependents can be eligible for deductions of up to VND19.4 million (USD737) per month, while those with one dependent can deduct up to VND25.6 million (USD974) per month. The relief also applies to foreign nationals with overdue tax liabilities and Vietnamese citizens leaving the country who have unpaid tax debts. Vietnam's economy has shown resilience, with over 125,900 new enterprises established between January and July, a 16.9% increase year-on-year. Agro-forestry-aquatic product exports reached nearly USD42.8 billion in the first seven months, up 7.5% from the same period last year. Realized FDI during January-July increased by 11.8% year-on-year to an estimated USD15.2 billion, the highest seven-month disbursement in five years. Total import-export turnover saw a significant increase of 28.1% year-on-year. International institutions like Standard Chartered have raised their growth forecasts for Vietnam, with projections of 9.5% GDP growth in 2026 and 11% in 2027. However, inflation remains a key concern, with July's CPI rising 4.45% year-on-year. The government is also focusing on enhancing efficiency through digitalization and AI-powered automated customs clearance. These tax extensions are a strategic move by Vietnam to maintain economic momentum while striving for price stability. Source: VietnamPlus English