About 700,000 enterprises are expected to enjoy a cut in corporate income tax (CIT) to between 15-17% from July 1 this year, down from the current rate of 20%.

People apply for business registration certificates at the Department
of Planning and Investment. (Photo: baodauthau.vn)

This is one proposal by the Ministry of Finance to be submitted to the National Assembly in the May meeting to implement the CIT incentive scheme for micro and small enterprises from July 1, six months earlier than the initial roadmap of January 1, 2021, to alleviate business difficulties amid the COVID-19 pandemic.

The tax rate for micro and small enterprises is 15-17% depending on the revenue and the number of employees of the business.

At the same time, new enterprises who transform from business households will enjoy an income tax exemption for two consecutive years from the time they first make a profit.

“In the case of implementing from July, the policy will assist 700,000 businesses, accounting for 93% of the total enterprises nationwide, reducing their tax obligation by about VND7.8 trillion in 2020,” said Minister of Finance Dinh Tien Dung.

It is estimated that the State budget will lose about VND15.6 trillion (US$669.5 million) in revenue every year.

In addition, to further support new enterprises, the ministry is proposing to slash business-related fees by between 50% and 70%, worth an estimated VND500 billion (US$21.5 million) this year.

The cut includes 70% of the enterprise registration fee; 67% of charges for providing information about enterprises; 50-70% of the fee for assessment, amendment and supplementation of postal operation licences.

The ministry is also revising its circular on licence tax. It is expected that in the second quarter, micro and small business converted from business households will be exempt from the licence tax.

The tax exemption period is three years from the issuing date of the first business registration certificate.

Earlier, the Ministry of Finance issued a circular slashing fees for nine service groups and offering six service groups free in the field of securities applied at the stock exchanges and depository centre.