Finance Minister Nguyễn Văn Thắng, authorised by Prime Minister Lê Minh Hưng, presents the Government’s proposal to the National Assembly. — VNA/VNS Photo

HÀ NỘI — The Government has proposed that the National Assembly (NA) approve a 30 per cent reduction in personal income tax and corporate income tax for 2026 and 2027 for individuals, household businesses and enterprises with annual revenues of no more than VNĐ10 billion (US$390,000).

Minister of Finance Nguyễn Văn Thắng presented the proposal to the NA on August 21, shortly after lawmakers agreed to add the draft resolution to the ongoing session's agenda.

It's aimed at providing timely support to small-scale businesses and enterprises, which continue to face difficulties despite a number of support measures introduced by the NA and Government since the beginning of the year.

Under existing policies, household and individual businesses with annual revenues of less than VNĐ1 billion are exempt from value-added tax and personal income tax, while enterprises with revenues below VNĐ1 billion are exempt from corporate income tax.

However, Minister Thắng said businesses with annual revenues of more than VNĐ3 billion currently have to calculate tax using the deduction method, which requires detailed accounting records and greater knowledge and time.

Many businesses and individual traders have therefore called for a simpler tax calculation method to be applied to those with annual revenues of up to VNĐ10 billion, instead of the current VNĐ3 billion threshold. This would reduce paperwork and save time and costs for both businesses and taxpayers.

The Government has proposed a 30 per cent reduction in personal and corporate income tax for the 2026 and 2027 tax years for individuals, household businesses and enterprises with annual revenues of no more than VNĐ10 billion.

The policy is estimated to reduce State budget revenue by about VNĐ3.19 trillion in 2026 and VNĐ3.51 trillion in 2027.

Thắng said the measure would initially reduce State revenue, but the lost revenue could be recovered in the longer term as household businesses and enterprises expand. More importantly, the tax savings would provide businesses and individual traders with additional resources to reinvest, expand production and increase incomes.

The Government has proposed that the NA adopt the policy during the current session, with the resolution taking effect in the third quarter, so that its impact can be felt immediately. The move is expected to help businesses and individual traders increase spending and investment and take advantage of the year-end business cycle.

Presenting the review report, Phạm Thị Phú Hà, vice chairwoman of the Committee on Economic and Financial Affairs, said the committee broadly agreed on the need for the resolution to provide timely support and help ease difficulties facing small-scale businesses.

The committee called on the Government to carefully assess difficulties and obstacles raised by voters, businesses and business associations and introduce practical measures to address them.

Regarding eligibility for the tax reduction, a majority of committee members agreed with the Government's proposal to cut personal and corporate income tax by 30 per cent for household businesses, individual traders and enterprises with annual revenues of no more than VNĐ10 billion in 2026 and 2027.

The committee also urged the Government to strengthen oversight and introduce measures to prevent businesses from artificially splitting or transferring revenues to qualify for the tax incentive. — VNS