The government has proposed a 2 per cent cut to value added tax (VAT) rates on goods and services subject to a 10 per cent rate, from July 1.

The reduction would be in place until December 31, 2023, according to the latest government proposal submitted to the National Assembly Standing Committee for approval.

It would not apply on 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 demand to accelerate production and trade and help businesses recover and develop to contribute to the State budget and the economy.