HANOI, June 24 (Reuters) - Vietnamese lawmakers on Saturday approved a government plan to extend a reduction in value added tax (VAT) on goods and services until the end of this year to boost domestic consumption and production, as its export-driven economy faces headwinds from slowing global demand.
The VAT cut to 8% from 10%, which has been in place since early last year, is not applicable to such services and products as banking, finance and real estate.
"The move will boost consumption, and hence supporting business and production activities," Minister of Finance Ho Duc Phoc said in a report to the National Assembly last month.
A VAT cut is expected to boost domestic consumption to compensate for the sharp fall in exports.
It last cut the refinance rate to 4.5%, the discount rate to 3.0% and the electronic interbank rate to 5.0% on June 19.
Persons:
Finance Ho Duc Phoc, Khanh Vu, Toby Chopra
Organizations:
Finance, National Assembly, State Bank of, Thomson
Locations:
HANOI, State Bank of Vietnam