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Wednesday, October 27, 2021

Gov’t proposes reducing income tax by 30% for small firms

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HCMC – Authorized by the prime minister, Minister of Finance Dinh Tien Dung on June 11 submitted a draft resolution to the National Assembly (NA) to offer a 30% corporate income tax cut for small businesses and cooperatives in 2020.

Minister Dung said that the global coronavirus pandemic has put a crimp in economic activity across local and international markets, with manufacturing operations in Vietnam becoming stagnant and many small firms suspending or stopping their operations.

The proposal to slash corporate income tax is aimed at supporting small firms, which are vulnerable to the volatility of the economy, the local media reported, citing Minister Dung.

Minister Dung also stated that those employing no more than 100 workers and earning no more than VND50 billion this year can avail of the tax cut.

The Government estimated that a 30% reduction in corporate income tax for small firms this year would cause a loss of VND15.84 trillion for the State budget, which will amount to VND22.4 trillion if the cut is applied for medium-size enterprises.

Data collected by the Government showed that small enterprises accounted for 93% of the 760,000 businesses operating in Vietnam as of late 2019, playing a key role in the country’s economic growth.

Nguyen Duc Hai, head of the NA’s Finance and Budget Committee, agreed with the Government’s proposal to reduce corporate income tax for small companies, saying that small firms have been the hardest hit by the coronavirus pandemic and had limited access to loans and technology, according to VnExpress news site.

A 30% cut in corporate income tax will help small enterprises overcome financial difficulties, Hai noted.

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