Under the proposal, corporate income tax for SMEs will be reduced to 15%-17% instead of the current 20%, according to the finance ministry.

The proposal will be submitted to the National Assembly for consideration and approval at its working session later this year.

The corporate income tax rate of 15% was proposed to be applicable to enterprise with annual revenue of below VND 3 billion and with less than 10 laborers paying social insurance premiums per year.

Meanwhile, the tax rate of 17% was proposed to be applicable to an enterprise with annual revenue from VND 3 billion to below VND 50 billion and with less than 100 laborers paying social insurance premiums per year.

An enterprises may also be entitled to exemption of corporate income tax for two consecutive years, starting from the time it earns taxable incomes, according to the proposal.

The Ministry said once the proposal is approved, State budget revenues will be reduced by VND 9,200 billion/year but in the long run, the proposal will help SMEs to increase funding for business expansion.

According to the White Book on Vietnamese Businesses 2019, Viet Nam had operational 714,755 enterprises as of December 31, 2018, or 14.7 enterprises per 1,000 persons./.