Small and micro businesses in Vietnam will have their income tax reduced, while those evolving from a household business will be given a two-year income tax exemption, according to a Ministry of Finance proposal. 

The ministry has handed in the proposal to the prime minister and the changes are expected to be brought up for discussion at the sitting of the law-making National Assembly in May, at a time when the business community is battered by the novel coronavirus. 

If approved, small and micro businesses in the Southeast Asian country will have their income tax lowered from 20 percent to 15-17 percent, depending on the scale of operations and the number of employees.

Small and micro companies that have transformed from household businesses will be given corporate income tax exemption for two years after making a profit.

The proposed regulation is expected to take effect in July and benefit about 700,000 small and micro businesses in the country.

The state budget will thus reduce its annual revenue by an estimated VND15.5 trillion (US$664.6 million).

The Ministry of Finance is also adjusting its circular on business license fees.

Accordingly, small and micro firms evolving from household businesses, as well as public general education establishments and public preschools, cooperatives, and unions operating in agriculture will be exempt from business license fees.

In addition, the finance ministry is seeking feedback on a 70-percent cut in enterprise registration charges and a 67-percent reduction in business information disclosure costs.

All of these changes are aimed at supporting the business community to cushion the negative impacts of the novel coronavirus disease (COVID-19) epidemic.

Vietnam has reported 258 infections, 144 of them having recovered.

No death linked to the disease has been confirmed so far.

The infection rate has seemed to decelerate over the past week, only a few cases being announced daily.

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