Vietnam cuts income tax for small businesses

The measure is expected to leave more resources with small businesses to support their operations and growth.

This food business earns around 270,000 US dollars a year. After expenses, the remaining income is subject to a 17% personal income tax rate.

Ngo Xuan Thuc, Business Owner, Hanoi said: "I pay around 1900 USD in personal income tax each year. A 30% reduction would save me roughly 620 - 650 USD. It may not be a large amount, but it would help us support our staff and cover electricity and water bills".

Businesses with annual revenues of no more than 380,000 USD will also receive a 30% reduction in corporate income tax for 2026 and 2027. They can use these added savings to maintain or grow operations.

Nguyen Trong Ninh, Chairman, VIC Group said: "A few hundred dollars may not be much, but it shows the Government’s support and gives small businesses more resources to reinvest and develop".

Speaking before the National Assembly, Minister of Finance Ngô Văn Tuấn said the 30% tax reduction is designed to support most business households and small enterprises. It is expected to benefit 99.98% of business households and around 81.11% of enterprises with annual revenues below 380,000 USD.

"For a business with annual revenue of  380,000 USD, a 30% tax reduction would provide support of around 150 - 190 USD a month. This is meaningful support for small businesses", Ngo Van Tuan, Minister of Finance said.

Even a few hundred dollars in tax savings can help cover electricity, water or labour costs, giving millions of businesses more resources to maintain and expand their operations.