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Official Gazette

Friday, October 7, 2022

Lower corporate income tax expected to benefit micro enterprises

Updated: 15:39’ - 15/09/2017
An official of the Vietnam Association of Small and Medium-Sized Enterprises (VINASME) has recently suggested comprehensive acts to be taken to remove difficulties for enterprises, including adopting a more effective corporate income tax reduction policy.

VINASME Vice President and General Secretary To Hoai Nam made the statement with regard to the Finance Ministry’s proposal to slash the corporate income tax rate from current 20 percent to 17 percent, even 15 percent for small-sized and micro- enterprises.

More comprehensive acts would be taken to remove difficulties for enterprises, including adopting a more effective corporate income tax reduction policy__Photo: Internet

A Finance Ministry representative said the Law on Corporate Income Tax’s provision on the criteria of SMEs eligible for lower corporate income tax rate was revised. The majority of the National Assembly’s Committee on Financial and Budgetary Affairs’ members shared the view that the identification of SMEs based on their turnover for the application of lower corporate income tax rate was appropriate to their economic nature.

In order to remove difficulties for micro- enterprises and encourage the transformation from business households to enterprises, the draft revised law provides a tax rate of 15 percent for micro-enterprises with a yearly turnover of under VND 3 billion and 17 percent for SMEs having no more than 200 employees on average annually covered by social insurance and a yearly turnover of between VND 3 billion and 50 billion.

The draft revision also sets out tax incentives for information technology (IT) sector. Specifically, enterprises providing important software services and digital information content products will enjoy a corporate income tax rate of 10 percent for 15 years after being entitled to a tax break for four years and 50-percent tax reduction for subsequent nine years.

The revised law is also expected to help step up the administrative procedure reform and help business households transform themselves into enterprises more smoothly, he said.

To increase the effectiveness of the policy, economic expert Nguyen Minh Phong suggested making public as soon as possible enterprises eligible for lower corporate income tax as well as relevant procedures in order to prevent abuse of the tax incentive and receiving more and more enterprises’ feedback and complaints about the implementation of the policy.- (VLLF)


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