Vietnam proposes 30% tax cut for small, household businesses

The ministry on Friday sought feedback on a draft National Assembly resolution on personal income tax and corporate income tax reductions for household businesses, individual businesses and enterprises.

Under the draft, eligible businesses would receive a 30-percent reduction in the personal or corporate income tax payable for the 2026 and 2027 tax periods.

The resolution is expected to take effect on the date it is approved by the National Assembly.

The ministry said the policy aims to help household businesses, individual businesses and enterprises reduce costs and free up resources to recover and expand production and business activities as the economy continues to need additional growth momentum.

Citing a survey by the Vietnam Chamber of Commerce and Industry, the ministry said 59.3 percent of household and individual businesses face difficulties due to rising and volatile input costs, while 43.8 percent struggle with declining purchasing power and market demand.

Another 32.6 percent face shortages of capital and labor.

Micro-enterprises face similar difficulties, the ministry said.

The ministry therefore proposed that the government submit the tax-cut resolution to the National Assembly to provide direct support to these businesses, helping them maintain and develop their production and business activities.

State budget revenue estimated to decline by $255 million

According to calculations by the drafting agency, if the policy is approved, state budget revenue would decline by about VND3.191 trillion ($121.6 million) in 2026, including around VND929 billion ($35.4 million) in personal income tax from household and individual businesses and VND2.262 trillion ($86.2 million) in corporate income tax.

The revenue reduction is estimated at around VND3.51 trillion ($133.4 million) in 2027, including VND1.022 trillion ($38.8 million) in personal income tax and VND2.488 trillion ($94.6 million) in corporate income tax.

Overall, the state budget is expected to collect about VND6.701 trillion ($255 million) less over the two years.

The Ministry of Finance said the reduction in state budget revenue would be a short-term impact.

In the long term, the policy would allow household businesses and enterprises to retain more resources for reinvestment, expand production and improve competitiveness, thereby generating more sustainable budget revenue and contributing to economic growth.

The ministry will submit the proposal to the government, which will then present it to the National Assembly for consideration and approval at its second session, expected to take place in October.