Vietnam to cut 30% corporate income tax in 2020

The Vietnamese National Assembly (NA) on June 19 agreed to cut 30% of corporate tax for businesses with revenue under VND200 billion (US$8.58 million) in 2020.

Vietnam to cut 30% corporate tax for businesses in 2020.

With an endorsement of over 92% of NA deputies present, the resolution would take effect after 45 days since the signing date and be applied for this year’s tax payment period.

Compared to the original proposal of the government, the NA decided to remove the criteria of the number of employees, aiming to ensure fairness for those having a large number of workers. It also included medium-sized enterprises as beneficiaries of this policy.

Chairman of the NA's Committee of Finance – Budget Nguyen Duc Hai said such changes would increase the tax amount forgone from an initial of VND15.84 trillion (US$680.02 million) to VND23 trillion (US$987.41 million).

Before the voting, many deputies voiced concern that the business community is in need of more direct and substantial support, rather than a corporate tax cut, to recover from the Covid-19 pandemic.

Regarding this suggestion, Hai said the government has been providing a number of relief packages in forms of waiving and freezing fees, charges, among others, including a payment deferral of taxes and land rental fees.

In the time to come, the government would continue to provide more support for enterprises affected by the Covid-19 pandemic, Hai stated.

To date, the government has rolled out supporting programs such as a credit aid package worth VND300 trillion (US$12.87 billion), a VND180-trillion (US$7.63 billion) fiscal stimulus package in forms of delay of payment of value-added tax, corporate tax and income tax, and a financial support package for vulnerable people worth VND62 trillion (US$2.7 billion).