Vietnam’s National Assembly has agreed to a corporate income tax reduction of 6 percentage points for most businesses to help them deal with Covid-19 impacts.
On Friday an overwhelming majority of National Assembly members voted in favor of a proposal by the Ministry of Finance to reduce the tax from 20 percent to 14 percent.
Businesses with annual revenues of 200 billion VND ($8.6 million) or less this year and fewer than 200 employees will be eligible for the tax break.
The criteria were widened from an earlier proposal of 50 billion VND($2.1 million) in revenues and less than 100 workers, with lawmakers saying more businesses should be offered the tax break.
This means medium, small and micro businesses, which account for 97 percent of the total number, will benefit.
The government’s tax revenues will reduce by 23 trillion VND($987 million).
A survey by the Ministry of Planning and Investment of 130,000 businesses found that their first quarter revenues fell by 25 percent year-on-year as a result of the pandemic.
In the first five months 26,000 companies suspended operations, a 36 percent increase year-on-year, according to the General Statistics Office.