Vietnam gov’t proposes 30% cut in corporate tax post Covid-19
The tax cut would benefit businesses with revenue in 2020 of less than VND50 billion (US$2.16 million) and a workforce not exceeding 100 employees.
The government on June 11 proposed to the National Assembly (NA) a 30% cut in corporate tax in this year for domestic businesses hurt by the Covid-19 pandemic, including small and micro-sized companies.
|Vietnam's government proposes 30% cut in corporate tax for small and micro enterprises in post Covid-19.|
Discussing the proposal at an NA session, Minister of Finance Dinh Tien Dung said the tax cut would benefit small and micro- businesses with revenue in 2020 of less than VND50 billion (US$2.16 million) and a workforce not exceeding 100 employees.
Dung said as small and medium enterprises (SMEs) account for 97% of total enterprises in Vietnam, if medium enterprises are also entitled to the tax cut, practically the majority of the business community would benefit from this policy.
This could cause unfair competition as many are having advantages of capital revenue and market shares, he added.
Under the current Law on Tax Administration, enterprises are responsible for declaring and paying taxes. Once the proposal is approved, businesses should identify themselves whether they are entitled to the rate cut or not.
The government estimated the move could lead to a decline of VND15.84 trillion (US$682.58 million) in state budget revenue. If medium enterprises are included, the decline could widen to VND22.4 trillion (US$965.27 million).
Head of the NA’s Finance – Budget Committee Nguyen Duc Hai agreed to the proposal, saying small and micro enterprises are the ones hardest hit during the Covid-19 pandemic.
Moreover, the tax cut scope covering only businesses with low revenue and number of workforce would relieve pressure on the state budget in 2020, Hai asserted.
While the majority of NA deputies support the proposal, some voiced concern that companies having growing revenue during the pandemic could also benefit from a tax cut, which only aims to support those affected by the pandemic.
Therefore, more specific criteria are needed, including those having revenue reduced by 30% compared to 2019.
- Vietnam no longer labeled as currency manipulator: US Treasury
- Hanoi Stock Exchange to stop listing new stocks from July 2023
- Central bank to tighten credit in “overheating” sectors: Governor
- C.bank expects credit growth to exceed 12%-target for 2021
- Vingroup may raise US$2 billion from VinFast’s IPO in US
- State budget collection reaches US$17.52 billion in Q1
- Newly-listed firms on HoSE to temporary switch to HNX
- Vn-Index predicted to hit all-time high of 1,300 pts in April
- Inflation not a source of concern for Vietnam: SSI
- Vietnam stock market watchdog sets reference price for stocks switching to HNX
Vietnam no longer labeled as currency manipulator: US Treasury
Travel to Ninh Binh: the outstanding tourism attraction of Mua Cave
Hanoi: domestic tourism stimulating program debuts
Ba Vi Tourism Festival - Highlight of Hanoi’s suburban tourism
Remarkable tour packages offered Reunification Day and Labor Day holidays
Danang announces list of housing projects for foreign ownership
Vietnam warned of imported Covid-19 transmission amid rising regional cases
Hanoi team ranks 1st at National Archery Championships 2021
Vietnam moves up in int’l vaccine regulation ranking