Tax cuts to strengthen resources for businesses

Additional capital for production and business development

Established in late 2024, CKT Tech Mechanical Processing Joint Stock Company, located in Le Thanh Nghi Ward, operates in mechanical processing and metal coating. In 2025, the company’s revenue was below VND 10 billion.

Mr. Pham Xuan Quang, the company’s director, said that the company is currently in the process of stabilizing its operations, seeking orders and building up resources for production.

“If we meet all the conditions to qualify for a 30% reduction in corporate income tax payable, the amount retained will provide the company with additional capital for production, from purchasing raw materials and tools to investing in processing activities. For a small-scale business, every cost saving can be reinvested in production,” Mr. Quang said.

According to the Hai Phong Tax Department, at the end of 2025, the city had more than 31,500 businesses with annual revenue below VND 10 billion, accounting for more than 75% of the total number of businesses that had submitted tax declarations to the tax authorities. This is not yet the number of businesses that will receive tax reductions in 2026, as eligibility is determined based on revenue in each tax period. However, it indicates the scale of the group of businesses targeted by the policy. The actual reduction will depend on the amount of tax payable by each business. Nevertheless, given the potentially broad scope of beneficiaries, the policy could provide additional resources for businesses across a wide range of production and commercial sectors.

Anh Khoa HD One Member Limited Liability Company, located in Tan Hung Ward, also recorded revenue below VND 10 billion in 2025. The company mainly supplies regional fruits to supermarkets and clean-food stores. After operating for many years as a household business, Mr. Nguyen Ta Khoa’s business was converted into a company in 2025. According to Mr. Nguyen Ta Khoa, the company’s director, the corporate model enables the business to organize its operations more systematically and expand its customer relationships, while also imposing higher requirements for management, accounting, invoicing and financial obligations.

Depending on the industry, scale and financial situation, the tax savings can be used in different ways, from supporting immediate operations to allocating resources for long-term investment and development plans.

Bringing the policy into practice

The Ministry of Finance is seeking comments on a draft Decree detailing Resolution No. 43/2026. Under the draft, businesses with projected revenue of no more than VND 10 billion in 2026 or 2027 may determine the amount of tax reduction themselves when making quarterly provisional corporate income tax payments. Business households and individuals with projected revenue not exceeding this threshold may declare the tax reduction together with their tax returns. If approved, eligible taxpayers could benefit from the reduction in the relevant tax period, without having to wait until the end of the year.

Allowing taxpayers to determine the amount of tax reduction during the declaration period would enable the policy to have an earlier impact on the cash flow of businesses, business households and individuals. Instead of waiting until the end of the tax period to determine the amount eligible for reduction, qualified businesses could calculate it when making quarterly provisional tax payments, while business households and individuals could declare it together with their tax returns. As a result, the amount of tax expected to be reduced could be retained earlier to support production and business activities.

However, projected revenue is only an initial basis for determining eligibility. Actual revenue for the entire tax period will determine whether a taxpayer meets the VND 10 billion threshold. If the threshold is exceeded, businesses must declare and pay the outstanding amount of tax in full; business households and individuals must likewise pay additional tax corresponding to the amount previously reduced, in accordance with regulations.

A representative of the Hai Phong Tax Department said that because the policy is based on actual revenue for the entire tax period, it is not yet possible to determine precisely how many business households, individuals and enterprises in the area will qualify for the 2026 tax reduction. However, taxpayer management data provides a basis for tax authorities to review and classify taxpayers, raise awareness, and provide guidance to those who may be eligible to benefit as soon as the detailed regulations are issued.

According to calculations by the Ministry of Finance, the policy is expected to reduce state budget revenue by approximately VND 3.191 trillion in 2026 and VND 3.510 trillion in 2027. Nationwide, more than 81% of businesses are estimated to have revenue within the VND 10 billion threshold when the policy was formulated.

Once the policy is clearly guided, conveniently implemented and applied to the right eligible taxpayers, these resources will have greater potential to flow back into production and business activities, supporting businesses, business households and individuals in accumulating capital, reinvesting and expanding their operations.

Ha Kien

Ha Kien