A garment production line of a small enterprise in the central province of Thua Thien-Hue. The small and micro enterprises are expected to enjoy 30 per cent reduction of corporate income tax this year. — VNA/VNS Photo Mai Phuong

The Ministry of Finance has proposed the Government cut corporate income tax for small and micro businesses by 30 per cent this year.

The proposal was sent to the Government recently. It will then be submitted to the National Assembly for approval this month.

If the proposal is approved, the State budget in 2020 will fall by about VND15.8 trillion (US$676 million).

The Ministry of Finance said the reduction will contribute to helping small and micro enterprises overcome difficulties caused by the COVID-19 pandemic, creating conditions for them to accumulate capital to develop production and business and improving competitiveness.

The beneficiaries include micro enterprises with revenue under VND3 billion and the number of employees participating in social insurance in 2020 not exceeding 10 people; and small enterprises which have total revenue not exceeding VND50 billion and the number of employees participating in social insurance not over 100 people.

The ministry said Viet Nam has about 760,000 businesses in operation. Of the figure, the group of small- and medium-sized enterprises accounted for 97 per cent of the total, including 63 per cent of micro enterprises, more than 30 per cent of small-sized enterprises and 4 per cent of medium-sized ones.

“Thus, the small and micro enterprises accounting for over 93 per cent will play an important role in economic development as well as social stability,” the ministry said.

The reduction of the State budget due to small and micro enterprise support will be offset by other taxes and sources, the ministry said in its proposal. — VNS