Cutting income tax payable by 30% for the 2026-2027 period, together with expanding the scope for applying a simplified tax calculation method, will help business households and small enterprises improve cash flow and reduce compliance costs. However, revenue splitting must be controlled to prevent the 10-billion-VND threshold from becoming a “cliff edge” that distorts business behaviour.

The Government has proposed a 30% reduction in personal and corporate income taxes for small-scale business households, individuals and enterprises in 2026 and 2027, as part of measures to ease business difficulties and support economic growth.

The proposal to reduce tax payable by 30% in 2026 and 2027 is expected to help business households, individual businesspeople and small enterprises ease cash-flow pressure and gain additional resources to maintain and expand operations.

The Government has raised the tax-exempt revenue threshold for household businesses to 1 billion VND (38,000 USD) per year, from the current 500 million USD, to support small businesses, according to a newly-issued policy.