The Ministry of Finance (MoF) has proposed to cut corporate income tax on small and micro-sized enterprises to 15-17% from a current common rate of 20%, depending on previous revenues, in its draft amendments to the Law on Corporate Income Tax.

The 15% tax rate scheduled to apply for enterprises with total annual revenue less than VND3 billion ($117,000) and the 17% tax rate would be applicable to enterprises with total annual revenue from VND3 billion to VND50 billion ($1.96 million).

The policy is aimed at creating conditions for small and micro-sized enterprises to expand production and trade as well as improve their competitiveness. It is also expected to encourage these enterprises to develop into businesses with larger scale, according to the MoF.

There are about 900,000 enterprises in Vietnam, of which small and micro-sized enterprises account for nearly 94%.