Reduce corporate income tax: Strong impact on the business will and excitement of enterprises

VCN - The tax reduction for small and medium enterprises to 15-17% is very important in the current context, however there are still many obstacles.
reduce corporate income tax strong impact on the business will and excitement of enterprises Reducing corporate income tax is base of revenue
reduce corporate income tax strong impact on the business will and excitement of enterprises Ha Noi has received over 60% of Income Tax finalization dossiers
reduce corporate income tax strong impact on the business will and excitement of enterprises Delay in the CIT finalization: Tax records of enterprises will be "marked"
reduce corporate income tax strong impact on the business will and excitement of enterprises
Mr. To Hoai Nam, Vice Chairman and General Secretary of Vietnam Association of Small and Medium Enterprises

Mr. ToHoai Nam (pictured), Vice Chairman and General Secretary of Vietnam Association of Small and Medium Enterprises (VINASME) speakswith Customs Newsaboutthis issue.

The proposal to reduce the corporate income tax rate to 15-17% instead of the current level of 20%, in your opinion, how willit affect small and medium enterprises?

The National Assembly's Resolution on a number of Corporate Income Tax Policies,supporting the development ofsmall and medium enterprises is the next step of the Law on Support for small and medium enterprises. In this Law, there are regulations to support tax for small and medium enterprises. With the common spirit of supporting the enterprises, I am very supportive and agree with this Resolution.

In the current context, the tax reduction will have a strong impact on the business will, and the business excitement of enterprises. Currently, small and medium enterprises account for over 95% of the total number of enterprises. Therefore, the reduction of corporate income tax will "strengthen" a very wide group in the business community, helping the enterprises have an additional amount of money to supplement their own capital to invest in production and business. When the enterprises do business well, the economy will grow, in which their contributiontothe budget is also better even if the tax rate is reduced.

If this tax reduction policy is implemented, it will be expected to meet and be compatible with the Small and Medium Enterprise Law.In fact, for many years, small and medium enterpriseshave faced many difficulties with high tax rates, poor competitiveness, low ability to access to bank credit,which has made the enterprisesdecline and mean they are unable to operate. Therefore,a reasonable tax rate will help the enterprises have more financial resources to expand production and business,reduce dependence on bank loans,save costs, and contribute to improve competitiveness and attract investment capital.

In addition to the goal of reducing the tax burden andhelping enterprises develop, in your opinion, what will the Resolution bring to SMEs in particular and the economy in general if it is implemented?

Vietnam has about 4 million individual business households. I believe that, if taxes are reduced andbusiness conditions are more favorable, there will be a large number of business households in the informal sector turning into enterprises and these additional enterpriseswill provide millions of jobs for the workers.

In addition, when the "health" of small and medium enterprises is still weak, the State's support through tax policy is very important to help the enterprises develop. The small and medium-sized enterprises are up and coming, so we can have a strong business community.

Along with the efforts of the Ministry of Finance, the business community also expects many other ministries to "study" under the Ministry of Finance, moving to have synchronous solutions to support the enterprises.

Besides support, many opinions also suggest that the thing which the enterprises need the mostis not only tax reduction but also many other factors to break through. So, would you like to share about the difficulties of small and medium enterprises today?

The policy of income tax reduction for enterprises is good but not enough. Because small and medium enterprises are not only facing difficulties in tax, but also many other difficulties such as: Access to land, credit, access to technology, supplychains. Especially, when the economy faces many difficulties as at present, many enterprises do business moderately, without interest, so they are not tax payers.

Moreover, the corporate income tax only impacts profitable enterprises, and for the enterprises that do business in moderation and face difficulties, the increase or decrease of tax does not affect their operations directly. For small enterprises, they need the regulations of finance, accountingto reduce the types of books so that the enterprises canimplement financial, accounting regulations easily, and reduce compliance costs.

What advice would you give to help finalize the resolution?

Proposing to exempt corporate income tax for 2 years from the time of having taxable income for the newly established enterprises from the business households and individuals is an extremely reasonable policy. However, it is more reasonable to increase the tax exemption period for this type of enterprise to 3 years, because this is an area that needs the support of the Government. According to our survey, the annual tax amount of this business sector is not much, so the 3-year tax exemption does not affect budget revenue. In addition, the 3-year tax exemption will also encourage the individual business households to convert the enterprises, in line with current Government policy.

In addition, the tax rate of 15% should be applied to all small and medium enterprises. There should not be too many tax rates because it will be difficult to implement and sometimes create an incentivefor the enterprises to "transform" to choose the tax rate for themselves.

reduce corporate income tax strong impact on the business will and excitement of enterprises Notes when making the final settlement of corporate income tax

In the long term, the State's support policies should focus on support measures to improve the quality of operations and competitiveness of enterprises. We need to developtransparent tax policies and facilitate enterprises. At the same time, the support of small and medium enterprises needs to be carried out through many different measures such as: access to credit, access to space, training of human resources, supportingaccess to science and technology innovation, promotion of market expansion.This means the production and business activities of enterprises will be more effective.

Thank you Sir!

Economic expert Nguyen Minh Phong: Request publicity and transparency

Want to reduce corporate income tax for the small and medium enterprises need to meet the requirements: First, to ensure that the reduction does not cause "shock" compared to the current level and is consistent with the commitment to integration. Second, it must be placed in correlation to compare the general level of other enterprises and other countries to ensure a certain balance. Thirdly, it must be based on the objectives of state management as well as the stamina of enterprises.

The Ministry of Finance's tax reduction proposal meets all three requirements. This is also a reduction not too strong to have a significant impact on budget revenues. Of course, this tax reduction is only effective for the enterprises that "do real, eat real".

In order for the tax reduction to be right and to meetthe object, the Ministry of Finance needs to be open and transparent to all taxpayers as well as the related processes and procedures to avoid the abuse of policies. At the same time, it is necessary to receive the assessment and complaints of enterprises in the implementation of this preferential policy, and at the same time mobilize the participation of social supervision. Only when doing so, the good policies for the enterprise really promote efficiency.

Mr. Nguyen Thanh Long, Director of Cat Loi Service Development Company Limited:

Creating trust to promote development of the enterprises A reasonable tax policy at this time is really necessary for the micro and small enterprises. For us, a dong reduced isgood. If the 17% tax rate will be applied next year, according to our calculations, the amount of money saved by the enterprises will be about 1 billion VND. This amount will contribute significantly to the revolving capital and essential infrastructure investment. Or more simply, instead of spending the basic salary to hire low-skilled employees, we can invest to hire more experienced and skilled personnel in the marketplace. Thanks to that, the business is also more efficient, the revenue forecast of next year will be higher than the previous year.

I appreciate the actions of the State in the past to create a business environment and support the enterprises to develop. This shows the State's interest in the small and medium-sized enterprises, creating trust and expectation to promote real business development.

Ms. Bui Thu Thuy, Studio Ruby Owner (Taking photos, professional makeup):

To transform into an enterprises if exempted from tax I think the biggest barrier for a household business is the Corporation Income Tax instead of the presumptive tax, the bookkeeping regime and the forms of inspection. Therefore, the form of business household is more "free" than becoming an enterprise. However, it is time to move to develop and expand your business. When I heard about the proposal for tax exemption within 2 years for the newly established enterprises, I am very glad because I intend to become an enterprise to professionalize business instead of being abusiness household as it is today.

If this policy is implemented, within the next 2 years we will not have to pay any tax, instead we can focus the capital to develop the business.

I also expect that, along with tax exemption and reduction, the State should also create conditions for the accounting book mechanism to be simple, effective and suitable for our business activities.

By T.Linh/ Binh Minh

Related News

Customs implements VAT reduction policy from July 1st

Customs implements VAT reduction policy from July 1st

VCN - To implement the contents relating to customs field, General Department of Vietnam Customs requested local customs departments to reduce VAT for group of commodities as stipulated at Decree 72/2024/NĐ-CP.
Enterprises expect the stock market to be upgraded by 2025

Enterprises expect the stock market to be upgraded by 2025

VCN - Vietnam is in the final stages of completing the remaining criteria for the stock market to be upgraded to an emerging market after nearly 10 years of starting the stock market upgrade process. According to assessments, the upgraded stock market to an emerging market will bring benefits in many aspects, especially in terms of reputation as well as the ability to attract foreign capital flows. Currently, enterprises are very hopeful about the market's upgrade ability in 2025.
Proposal to continue reducing VAT by 2% to support people and businesses

Proposal to continue reducing VAT by 2% to support people and businesses

In the first 4 months of 2024, Vietnam's economy achieved a higher growth rate than the same period of 2020-2023. However, the difficulties of the economy are still great, the recovery of the business community is still slow. Therefore, the Government has just submitted a proposal to the National Assembly for consideration, allowing to the continued implementation of the policy of reducing the value-added tax (VAT) rate by 2% for a number of groups of goods and services that are being subjected to VAT rate of 10% in the last 6 months of 2024. This is a support policy that is bringing many practical effects to people and businesses.
Opportunity for Vietnam to improve its business investment environment

Opportunity for Vietnam to improve its business investment environment

VCN - Minister of Planning and Investment Nguyen Chi Dung affirmed that it is necessary to comprehensively evaluate the system of policies and laws on investment encouragement to supplement and adjust new incentive and investment support mechanisms to ensure ensuring competitiveness and attractiveness of the investment environment.

Latest News

Quality varieties spur Vietnamese rice industry

Quality varieties spur Vietnamese rice industry's growth: experts

The success of the rice sector is the fruit of a concerted effort spanning research, production and trade, with high-quality seeds delivered to farmers' hands, former Minister of Agriculture and Rural Development Cao Duc Phat has assessed.
Minister asks for FIATA’s support in dealing with increased shipping freights

Minister asks for FIATA’s support in dealing with increased shipping freights

Minister of Industry and Trade Nguyen Hong Dien has suggested the International Federation of Freight Forwarders Associations (FIATA) provide practical measures to assist Vietnamese businesses in overcoming challenges caused by the increased shipping freight rates, port congestion, and shortage of empty containers.
Efforts made to help firms deeply join global semiconductor supply chain

Efforts made to help firms deeply join global semiconductor supply chain

The Ministry of Planning and Investment (MPI) has taken various solutions to support domestic firms to join the global semiconductor supply chain more intensively, heard a meeting held on July 15 by the ministry.
What do businesses do to cope with foreign trade traps?

What do businesses do to cope with foreign trade traps?

VCN - In commercial disputes that are required to be resolved at the Vietnam International Arbitration Center (VIAC), many Vietnamese businesses are suffering disadvantages due to negligence right from the negotiation and contracting.

More News

Shifting production to expand exports to the Northern European market

Shifting production to expand exports to the Northern European market

VCN - Nordic countries often map out policies to achieve EU goals sooner than others. Among them, general principles and standards regulating manufacturers' responsibilities for textiles and garments from Nordic countries need to be paid attention by businesses.
Businesses advised to stay prudent to avoid trading scams

Businesses advised to stay prudent to avoid trading scams

Authorities have continuously warned Vietnamese businesses to stay prudent when trading with foreign partners in the face of a recent scam increase.
Leather, footwear exports to hit 27 billion USD in 2024

Leather, footwear exports to hit 27 billion USD in 2024

Export revenue of the leather, footwear and handbag sector is predicted to hit 26-27 billion USD in 2024 on the basis of the positive results seen so far, according to the Vietnam Leather, Footwear and Handbag Association (LEFASO).
Tra fish export to CPTPP market reaches 114 mln USD as of June 15

Tra fish export to CPTPP market reaches 114 mln USD as of June 15

Vietnam raked in 114 million USD from tra fish export to the signatory nations of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) as of June 15, a year-on-year increase of 10%, according to the General Department of Vietnam Customs.
Building a Vietnamese brand associated with green and sustainable development

Building a Vietnamese brand associated with green and sustainable development

VCN - According to experts, in the current context, branding becomes more urgent, helping to increase endogenous resources for businesses, helping businesses move towards strong development, gradually reaching further in the domestic and world markets.
Pepper export turnover up over 30% in H1

Pepper export turnover up over 30% in H1

Vietnam exported 142,586 tonnes of pepper in the first half of this year, down 6.8% in volume but up 30.5% in value, the Vietnam Pepper and Spice Association (VPSA) has reported.
Dong Nai remains FDI magnet in H1

Dong Nai remains FDI magnet in H1

The foreign direct investment (FDI) influx into the southern industrial hub of Dong Nai in the first six months of this year was equivalent to 138% of the locality’s plan for the whole year.
Vietnamese agricultural products, food expected for deeper engagement in global supply chain

Vietnamese agricultural products, food expected for deeper engagement in global supply chain

Vietnam boasts advantages and potential in agricultural production and export, yet domestic firms need to do more to join the global food supply chain more intensively, insiders have said.
Developing export markets along with trade promotion

Developing export markets along with trade promotion

VCN - Import and export of goods in the first 6 months of 2024 continue to record positive results, total turnover is estimated at USD 369.6 billion, up 16% over the same period last year.
Read More

Your care

Latest Most read
Quality varieties spur Vietnamese rice industry

Quality varieties spur Vietnamese rice industry's growth: experts

The success of the rice sector is the fruit of a concerted effort spanning research, production and trade, with high-quality seeds delivered to farmers' hands, former Minister of Agriculture and Rural Development Cao Duc Phat has assessed.
Minister asks for FIATA’s support in dealing with increased shipping freights

Minister asks for FIATA’s support in dealing with increased shipping freights

Minister of Industry and Trade Nguyen Hong Dien has suggested the International Federation of Freight Forwarders Associations (FIATA) provide practical measures to assist Vietnamese businesses in overcoming challenges caused by the increased shipping freight rates, port congestion, and shortage of empty containers.
Efforts made to help firms deeply join global semiconductor supply chain

Efforts made to help firms deeply join global semiconductor supply chain

The Ministry of Planning and Investment (MPI) has taken various solutions to support domestic firms to join the global semiconductor supply chain more intensively, heard a meeting held on July 15 by the ministry.
What do businesses do to cope with foreign trade traps?

What do businesses do to cope with foreign trade traps?

VCN - That was shared by VIAC experts at the Conference "Current foreign trade transactions: Changes in business strategy and dispute management" held in Ho Chi Minh City last weekend.
Shifting production to expand exports to the Northern European market

Shifting production to expand exports to the Northern European market

General principles and standards regulating manufacturers' responsibilities for textiles and garments from Nordic countries need to be paid attention by businesses.
Mobile Version