The move comes as Vietnam grapples with rising public debt. It is considered one way of increasing state budget revenues.
The VAT increase would take place in a context where the Ministry of Finance is increasing other taxes such as corporate income tax, personal income tax and especially import and export tax. State budget revenue will unstable if corporate income tax is sharply reduced for small and medium enterprises in addition to cuts in import and export tax at the beginning of 2018 to 0% on cars and motorbikes.
