On the afternoon of August 20, the National Assembly Standing Committee commented on the National Assembly's Resolution project on reducing personal income tax and corporate income tax for individuals and businesses.
On behalf of the Government, Minister of Finance Ngo Van Tuan presented the Resolution project proposal. In the proposal, the Government proposed a 30% reduction in personal income tax payable for the 2026 and 2027 tax periods for business income of individuals with annual revenue of no more than 10 billion VND.
Enterprises with total revenue of up to 10 billion VND can also receive a 30% tax reduction for the same period.
This policy is expected to reduce budget revenue in 2026 by about 3,191 billion VND and 3,510 billion VND in 2027. "This is an immediate revenue reduction, but in the long term it will return to the budget when business households and enterprises develop," Mr. Tuan said.
The Minister also affirmed that the reduced tax rate will be a resource for households, individuals and businesses to reinvest in expanding production and increasing disposable income.
The 30% reduction in tax payable has been applied during difficult economic periods, such as 2008, 2012 and the Covid-19 period.
The Government proposes that the National Assembly and the National Assembly Standing Committee allow the Resolution to be promulgated in an abridged order and passed at the ongoing second session of the Standing Committee.
The resolution is expected to take effect from the third quarter of 2026, to have an immediate positive impact on people and businesses, helping them proactively shop and invest, not missing out on the year-end business cycle.
National Assembly Chairman Tran Thanh Man supports the proposal to reduce taxes on individual businesses and corporate income tax. According to him, this is "very necessary" so that people have more disposable income and businesses have more resources to invest in the economy and expand production.
However, the Chairman of the National Assembly requested the Government to clarify a number of related issues, including the need to explain the basis for choosing the 30% reduction and the revenue threshold of 10 billion VND a year.
He emphasized that the ultimate goal must be to reduce taxes on the right subjects, at the right level and at the right target, associated with the areas that the State wants to promote today. These fields include innovation, high technology, supporting industries; green economy; digital transformation; improve labor productivity.
Immediately afterwards, Minister Ngo Van Tuan briefly explained the reason for choosing the revenue threshold of 10 billion VND and the 30% tax reduction.
According to Mr. Tuan, total revenue of 10 billion VND divided on average per month is about 833 million VND. With an assumed profit of about 12%, the Ministry of Finance estimates that business households can actually receive about 100 million VND per month and 85 million remaining after paying taxes.
"With this amount of money, a family of 5 people shares an average of about 17 million VND per person per month. This is also a level suitable for the standard of living, encouraging people to continue doing business," said the Minister of Finance.
Along with that, the Chairman of the National Assembly also noted that reducing the tax burden for individuals and businesses also needs to be associated with facilitating tax payment methods and strictly controlling tax evasion and transfer pricing.
In the long term, he proposed that the Ministry of Finance calculate a plan to adjust the family deduction level according to fluctuations in living standards and living costs. This is to limit the situation where people are pushed to higher tax levels when nominal income increases due to inflation.
