In the draft National Assembly Resolution on reducing personal income tax (PIT) and corporate income tax (CIT) for business households, individual businesspeople and enterprises, the Ministry of Finance proposes a significant reduction in PIT and CIT payable in 2026 and 2027. The beneficiaries are business households, individual businesspeople and enterprises with revenue of up to 10 billion VND.

Direct support option

Commenting on the policy, Prof. Dr Mac Quoc Anh, Vice Chairman of the Ha Noi Small and Medium Enterprises Association, said that for small and micro enterprises, a lack of cash can still push businesses into difficulty. They have many expenses to cover, including wages, premises, raw materials, logistics, loan interest, social insurance, technology, marketing and various fixed costs before receiving payment from customers.

A 30% reduction in tax payable would allow enterprises to retain part of their resources and use them proactively according to their needs. This amount could be added to working capital, invested in machinery, software, digital transformation, labour recruitment, market expansion, or used to reduce outstanding debt and interest costs.

In particular, this support is not a state budget grant to enterprises, but a reduction in obligations payable. Therefore, implementation costs could be much lower than those of a support programme based on dossier appraisal. In an increasingly competitive market, small enterprises compete not only on price, but also on quality, brand, technology, delivery speed, ESG standards, traceability, e-commerce and their capacity to participate in supply chains.

“If enterprises use the reduced tax amount to reinvest in machinery, automation, data, AI, e-commerce, governance, product development or international standard certification, the value of the policy will not stop at the amount of tax reduced, but can be converted into new productivity and revenue,” Mac Quoc Anh stated.

Under the proposal, the policy could be applied from the tax period of the third quarter of 2026, thereby allowing taxpayers to reduce 30% of tax payable instead of having to wait until the end of 2026 for application.

Le Van Tuan, Director of Keytas Tax Accounting Co., Ltd., assessed that while many other support measures require time for implementation and practical evaluation, reducing the amount of tax payable will have a direct impact on taxpayers’ cash flow. This is also a form of support that can quickly prove effective, helping enterprises, business households and individual businesspeople gain additional resources to cope with pressure from fluctuations in input costs.

Considering broader support coverage

However, according to this expert, with the expected revenue reduction of 3.191 trillion VND in 2026, equivalent to around 0.12% of total State budget revenue in 2025, the scale of support is considered relatively modest.

If applied only to the group with revenue of up to 10 billion VND, the policy will find it difficult to create a clear impact on economic growth. Therefore, the drafting agency could consider raising the revenue threshold to 50 billion VND per year, which could broaden the support coverage and help more business households and individual businesspeople have time to adapt to tax requirements and compliance costs.

According to Mac Quoc Anh, the goal of the policy should not stop at supporting the smallest enterprises, but should also create motivation for enterprises to expand in scale. If the preferential threshold is too low and the difference in benefits immediately beyond that threshold is large, the policy could unintentionally create a reluctance to grow or encourage the splitting of operations in order to continue enjoying incentives.

Therefore, it is not necessary to apply the same 30% reduction to the entire group with revenue from 0 to 50 billion VND. A tiered support mechanism could be studied: enterprises with revenue of up to 10 billion VND would enjoy the highest reduction; those with revenue of over 10-30 billion VND would receive a lower rate; and those with revenue of over 30-50 billion VND would still receive support, with priority given to enterprises in production, supporting industries, exports, innovation, green transformation, digital transformation or job creation.

For business households and individual businesspeople, there should continue to be a separate roadmap, linking tax policy with incentives to transform into enterprises once they reach a certain scale. This approach would both expand support coverage and ensure budget balance, while limiting the “policy cliff” effect, where an enterprise that exceeds the revenue threshold by only a small amount could lose all incentives.

From a more cautious perspective, economist Nguyen Quang Huy said the revenue threshold for tax incentives should not be expanded hastily before the policy has been implemented and fully evaluated.

The policy should first be applied to enterprises, business households and individual businesspeople with revenue of up to 10 billion VND, as currently proposed. Management agencies can then conduct a substantive review and assessment of its effectiveness. The evaluation should not stop at the number of beneficiaries or the amount of tax reduced, but should comprehensively examine the impact on cash flow, investment capacity, production expansion, job creation and the competitiveness of enterprises. At the same time, the impact on the State budget should be quantified to provide a basis for appropriate policy adjustment.

Based on such practical data, management agencies could consider raising the revenue threshold to a higher level if the policy proves effective. The 50 billion VND threshold is an option that could be studied to expand support coverage for the small and medium-sized enterprise sector. However, any adjustment should be made according to a roadmap, ensuring a balance between the goal of supporting growth and the requirement of budget stability.

Creating motivation for sustainable development

The Ministry of Finance plans to submit the proposal to the Government so that it can report to the National Assembly for consideration and approval of the Resolution at its second session in October 2026, with application to the tax periods of 2026 and 2027.

However, tax reduction is only one of many tools to support enterprises. To create motivation for sustainable development, according to Tuan, it is necessary to continue promoting administrative procedure reform, reducing compliance costs, accelerating digital transformation and improving enterprises’ governance capacity. This should go hand in hand with measures to expand markets, promote trade and strengthen connections between domestic enterprises and supply chains and international partners.

Enterprises need not only cost support, but also favourable conditions to access new business opportunities. When markets are expanded, governance capacity improved and the business environment becomes more favourable, enterprises will be able to increase revenue, improve profits and enhance competitiveness. At that point, the tax reduction policy will not only provide immediate support, but also become an investment in the long-term development of the private economic sector.

“The goal of the policy should not only be to reduce the financial burden in the short term, but also to nurture long-term budget revenue through enterprise development. Cost reduction, expanded business opportunities and improved competitiveness need to be implemented simultaneously so that support policies can produce sustainable results,” Huy affirmed.