Tax reduction: 'Medicine' to boost businesses

Tax reduction policies that support and stimulate both "input and output" are even more meaningful to businesses.

The VAT reduction policy helps businesses sell more goods, thereby expanding production and creating more jobs - Photo: NGUYEN KHÁNH

A businessman who owns a handicraft production facility in Thach That district ( Hanoi ) specializing in exporting handmade wooden products to the European Union market shared that from the end of 2023, orders have decreased by nearly 50% due to inflation in Europe and stricter requirements for inspection of raw material origin.

Although there is profit, it is very low (less than 3%), so this businessman believes that if the corporate income tax rate remains at the old 20%, the profit will be almost zero. Meanwhile, the new tax incentive can help the business retain more than 300 million VND, enough to pay workers' salaries and maintain the next order.

A small-scale food service company in Cau Giay district (Hanoi) confided that its operations were heavily affected by the trend of tightening spending while raw material prices increased, customers decreased, and premises costs were high.

Therefore, the 2% VAT reduction helps lower menu prices and retain customers. Although the VAT reduction is small, it is extremely meaningful in helping businesses overcome the low season and not have to close.

Or a technology start-up providing integrated management solutions (ERP) for small and medium-sized enterprises has been operating for 3 years but is still not profitable.

This enterprise also faces difficulties in accessing tax incentives because it does not meet the conditions of a "high-tech enterprise".

Therefore, businesses expect a preferential corporate income tax policy for technology businesses with clearer criteria to help reduce taxes and contribute to reducing cash flow pressure.

It can be said that the business community in many industries and fields are looking forward to tax reduction.

Therefore, the VAT policy approved by the National Assembly on June 17 with a 2% reduction and expansion of many products and services is a timely "replenishment".

Along with the new policies in the previous Corporate Income Tax Law with tax exemptions and reductions from 10% - 17% for many fields, it has been enthusiastically received by the business community.

According to the General Statistics Office, in the first five months of 2025, over 111,600 businesses withdrew from the market, an increase of more than 14.4%.

In Hanoi alone, more than 5,000 businesses have ceased operations, mainly concentrated in the fields of trade, manufacturing and civil construction.

Many businesses are facing major challenges such as trade and geopolitical tensions as the US-China trade war has not yet cooled down, conflicts in many regions such as Russia-Ukraine or the Middle East have broken supply chains, and raw material prices have fluctuated strongly...

Therefore, if reducing corporate income tax helps support input factors so that businesses have more resources to invest or restart production, "start up" again, reducing VAT helps stimulate output, giving businesses' products and goods more competitive advantages and bringing them closer to users.

Tax reduction policies support and stimulate both "input and output" and are therefore even more meaningful to businesses.

To bring incentives to businesses soon, the next thing to do is to simplify procedures for accessing tax incentives, especially for start-ups, innovation, and digital transformation businesses.

Strengthen the role of local business associations in reflecting on reality, proposing more realistic policy recommendations, and have annual public monitoring reports on the level of business access to incentives, investment efficiency, and profit re-use rates for reinvestment.

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MAC QUOC ANH (PERMANENT VICE PRESIDENT OF THE HANOI ASSOCIATION OF SMALL AND MEDIUM ENTERPRISES) - NGOC AN

Source: https://tuoitre.vn/giam-thue-lieu-thuoc-tiep-suc-doanh-nghiep-20250618075453338.htm