The Ministry of Finance is seeking comments on a draft National Assembly resolution proposing reductions in personal income tax and corporate income tax for business households, individual businesses, and enterprises. Accordingly, it proposes a 30% reduction in personal income tax and corporate income tax payable in 2026 and 2027 for households, individual businesses, and enterprises with annual revenues of no more than VND 10 billion.

Production at a private enterprise in Trang Dai Ward.

If approved, the policy will create additional financial room for small-scale businesses while continuing efforts to support the private economic sector in the new period.

Retaining Resources for Businesses

A notable point of this proposal is that the reduction is calculated directly on the amount of tax payable. Resident business households and individuals with annual revenues of up to VND 10 billion would receive a 30% reduction in personal income tax payable for the 2026 and 2027 tax periods. Enterprises with annual revenues of up to VND 10 billion would also be eligible for a proposed 30% reduction in corporate income tax payable during these two years.

The Ministry of Finance said the policy aims to directly support these groups in the current period, helping them retain profits for reinvestment and production expansion; while also increasing disposable income, promoting consumption and accumulation, and contributing to the goal of achieving high economic growth.

Notably, this is not an isolated support policy. In recent years, the State has implemented various tax, fee, and administrative procedure measures to reduce costs for individuals and businesses. The new proposal continues to place business households and micro enterprises at the center, as these groups have limited financial resilience but account for a very large number of businesses in the economy.

For a business or household with annual revenues of several billion dong, the amount of tax reduced may not be significant when considered individually. However, when aggregated, the resources retained can create additional cash flow for the economy. Businesses can use this money to purchase raw materials, retain workers, cover operating expenses, invest in equipment, or expand their markets.

According to Mr. B.T.T., owner of a fashion store in Tan Trieu Ward, business establishments have many operating expenses that do not qualify as deductible expenses, causing taxable income to be higher than actual income. If the revenue threshold is raised from VND 3 billion to VND 10 billion per year, business households will feel more secure.

Similarly, Mr. Nguyen Van Huynh, Director of Tam Long Hung Phat Co., Ltd. in Bien Hoa Ward, said that for small and micro enterprises today, the market is an urgent concern. Therefore, the resources retained will help businesses supplement working capital, maintain employment, improve workers' incomes, expand markets, and enhance their competitiveness.

Giving Businesses a Boost to “Grow”

The more important perspective on the proposed tax reduction is to view it within the broader policy framework for developing the private economy. Resolution No. 68-NQ/TW of the Politburo identifies the private economy as one of the most important drivers of the economy, while setting the goal of creating a favorable business environment for this sector to develop rapidly and sustainably.

For the private sector to become stronger, the economy cannot rely solely on a small number of large enterprises. It needs a large base of small businesses capable of accumulating resources, innovating, and gradually expanding. Small and medium-sized enterprises are an important part of this foundation.

A survey by the Vietnam Chamber of Commerce and Industry (VCCI) showed that nearly 59.3% of business households and individuals continue to face difficulties due to rising and fluctuating input costs, while more than 43.8% encounter obstacles related to consumer markets. In addition, 32.6% of survey participants said they were facing shortages of capital and human resources. This is also a similar situation among micro enterprises.

According to Dau Anh Tuan, Deputy Secretary-General and Head of the VCCI Legal Department, the key challenge in the current period is gradually shifting from encouraging the establishment of new businesses to supporting enterprises in surviving, accumulating resources, and expanding their scale. Although the rate of market entry remains high, the rate of business exits has also increased significantly, while most existing enterprises are not yet ready to expand. Therefore, support policies should not focus solely on counting the number of newly established businesses, but should also measure and improve their ability to survive, accumulate resources, and grow after entering the market.

The 30% tax reduction over two years can be viewed as a “buffer” that allows businesses to continue accumulating resources amid ongoing pressures related to costs, markets, and capital. Importantly, the policy does not replace businesses in making decisions, but gives them additional resources to decide how best to use them.

According to experts, Vietnam's current policies are gradually shifting from short-term support measures toward creating an environment in which the private economy can develop independently. When tax costs are reduced, businesses have more opportunities to invest in productivity. When procedures are simplified, more time can be devoted to business operations. When access to capital, technology, and markets improves, tax support can fully demonstrate its effectiveness.

However, it is also necessary to recognize that the tax reduction is a time-limited support measure and cannot replace policies concerning capital, land, technology, labor, and markets. If the business environment continues to involve high costs, businesses may primarily use the reduced tax amount to offset immediate difficulties rather than invest in growth.

According to calculations by the Ministry of Finance, the policy is expected to reduce state budget revenue by approximately VND 6.7 trillion over two years. This is the amount of resources that the State is willing to leave with the production and business sector in the short term, with the expectation of creating additional momentum for economic growth.

 

Vương Thế

Source: Báo Đồng Nai