2% VAT REDUCTION FOR SMALL BUSINESSES: A REAL OPPORTUNITY FOR RECOVERY

Vinex Official
May 14
3 min read

Updated: May 22

In the midst of an unpredictable economic landscape, the government's decision to implement a 2% VAT reduction for several sectors currently taxed at 10% is a bold move. Specifically, this is seen as an "oxygen boost" for small and medium-sized enterprises – the group most affected by declining consumer demand and rising input costs.

**2% VAT Reduction – A Financial Boost that Helps Small Businesses Save Costs, Increase Profits, and Achieve Sustainable Recovery.**

What is the 2% VAT Reduction? Can Small Businesses Benefit from It?

According to the latest resolution, the Value-Added Tax (VAT) has been reduced from 10% to 8% for many goods and services until the end of 2025. This policy is a short-term support measure that can create long-term effects if utilized correctly.

Small and medium-sized enterprises (SMEs), individual business owners, and even newly established startups can benefit from this reduction if they operate within sectors included in the tax reduction list.

Major Impacts of the 2% VAT Reduction for Small Businesses

1. Cost Reduction – Increased Financial Flexibility

For businesses with limited operations, every saved cost is a vital opportunity for survival. The 2% VAT reduction provides businesses with more flexibility in pricing: they can either lower prices to stay competitive or maintain prices to increase profit margins.

A furniture workshop in Binh Duong spends an average of 300 million VND per month on materials. The VAT reduction helps them save about 6 million VND per month – equivalent to one-third of a skilled worker’s salary. This makes the difference between continuing production or having to cut staff.

Stimulating Domestic Consumption

While international markets are shrinking, domestic purchasing power becomes the key support. With the reduction in VAT, retail prices can also decrease, making products more accessible to consumers.

A chain of cosmetic stores in Ho Chi Minh City adjusted their combo prices based on the new VAT rate – reducing prices by 10,000 to 25,000 VND per combo. Although this is not a huge reduction, it was enough to increase online order conversion rates, especially among price-sensitive customers like female students and office workers.

Encouraging Transparency and Official Operations

The VAT reduction is not just temporary relief; it is a positive signal encouraging small businesses to operate legally and transparently. With lower tax burdens, many small businesses will be motivated to register for tax codes, expand operations, or formalize their businesses.
Vinex Helps Small Businesses Effectively Leverage the 2% VAT Reduction
🔸 Free Consultation on Eligibility and ApplicationNot sure if your business qualifies for the tax reduction? Vinex’s team will check and guide you for free.
🔸 Business Setup and Legal Operation OptimizationRunning a small business and want to operate legally to enjoy tax benefits? Vinex helps you register your business in the correct sector, with no unnecessary hassle.
🔸 Long-term Partnership with Small and Medium BusinessesVinex is not just about paperwork – we are your partner: keeping you updated on policies, reminding you of tax reporting deadlines, supporting basic legal matters, and optimizing operational costs.

The 2% VAT reduction for small businesses is not just a financial policy; it’s a message of encouragement: small businesses still hold value in the broader economic picture. In an unpredictable market, every opportunity to save – every small boost – could be a springboard for you to rise stronger. Make the most of this opportunity wisely, and if you need a knowledgeable partner who understands both the law and your needs, Vinex is always ready to help.