The government has issued a decree on cutting the value added tax (VAT) rate by 2 per cent on goods and services subject to a 10 per cent rate.

Applied from July 1 to December 31, the reduction is in line with a National Assembly Resolution on the reduction.

The new rate will not apply to the following goods and services: telecommunications, financial activities, banking activities, securities, insurance, trading of real estate, metals, precast metal products, mining products (excluding coal mining), coke mining, refined oil, chemical products, and goods and services subject to excise taxes.

The government said the policy is aimed at boosting consumption to increase production and trade and help businesses recover and develop to contribute to the State budget and the economy.

A VAT cut of 2 per cent last year helped support businesses and individuals and totaled some VND44.5 trillion ($1.87 billion), contributing to spurring production and business, generating jobs, stimulating consumption, and raising State budget collections.