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Vietnam mulls lower income tax for SMEs

The Ministry of Finance in Vietnam has proposed a lower corporate income tax (CIT) rate for small and micro-sized enterprises to help them overcome difficulties and promote growth. Small businesses are expected to account for the majority of existing enterprises and play an important role in the country’s socio-economic development. The tax rate could be fixed or progressive depending on the size of the businesses’ income. Many countries offer lower CIT rates for small businesses; for instance, China's common CIT rate is 25%, while small enterprises enjoy a preferential rate of 20%. However, Vietnam has previously abolished such proposals. SMEs in Vietnam expect that the proposal to reduce CIT on them will be approved, which would help them have resources for investing in production and business, especially in the context of post-pandemic difficulties and increasing uncertainty in the global market.

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