HCMC – Vietnam will continue supporting businesses by maintaining low corporate income tax (CIT) rates, even as many countries worldwide are raising taxes, said Deputy Prime Minister Ho Duc Phoc at a National Assembly session on November 28.
The current CIT law imposes a 15% tax on businesses with annual revenue below VND3 billion and 17% on those earning between VND3 billion and VND50 billion. However, the standard CIT rate stands at 20%.
Some lawmakers voiced concerns about the impact of these rates on small and medium-sized enterprises (SMEs), which account for 97% of businesses in Vietnam. Nguyen Thi Le, a deputy from HCMC, said that the 20% standard rate is high compared to other ASEAN countries and suggested reducing it to 19%.
Deputy Pham Van Hoa from Dong Thap Province highlighted the need to ensure tax compliance among e-commerce businesses operating on digital platforms, emphasizing fairness for domestic enterprises.
In response, Deputy PM Phoc acknowledged these concerns and stressed the importance of a fair and pro-growth tax system. He noted that while other nations are tightening fiscal policies and increasing taxes, Vietnam is pursuing an expansionary fiscal policy to support post-pandemic economic recovery.
“Our corporate income tax rates are still low compared to other Southeast Asian countries,” Phoc said, referencing higher rates in the Philippines (30%) and Malaysia (24%). He also affirmed that all businesses, including foreign ones generating income in Vietnam, are subject to taxes.
Phoc proposed granting the Government flexibility to adjust revenue thresholds for tiered tax rates, ensuring they remain relevant amid price fluctuations. This approach, he said, would create a more accurate and adaptive tax system.
