Ministry proposes slashing corporate income tax by 30% for small, micro businesses
The Ministry of Finance has proposed that the Government reduce corporate income tax by 30% for small and micro enterprises in 2020 to help them overcome difficulties caused by the Covid-19 pandemic.
Data collected by the ministry show that small and micro enterprises accounted for 93% of 760,000 businesses operating in Vietnam as of late 2019.
According to the law on supporting small- and medium-sized enterprises, micro and small businesses are defined as those employing no more than 10 and 100 workers who have social insurance and earn no more than VND3 billion and VND50 billion a year, respectively.
The policy is also expected to help small and micro businesses recover production, improve competitiveness and expand operations.
However, the Ministry of Finance noted that some businesses will take advantage of the policy by falsifying their employee numbers and revenues to enjoy a tax reduction.
The ministry estimated that a 30% cut in corporate income tax for small and micro enterprises this year would cause a loss of VND15.84 trillion for the State budget. SGT
The COVID-19 pandemic is a huge challenge for businesses irrespective of sector and size in all regions and countries, including Vietnam.
Many Vietnamese small- and medium-sized enterprises (SMEs) are facing cash flow problems triggered by the ongoing Covid-19 pandemic, stated a survey by the Vietnam Chamber of Commerce and Industry (VCCI).