Vietnam to cut SME corporate tax by 30 pct

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Vietnam will slash corporate income tax for small and medium-sized enterprises this year in an attempt to stimulate the economy.

Under a government decree effective September 20, corporate tax will be cut by 30 percent for SMEs, except those operating in lottery, real estate, securities sectors and producers of goods that are subject to luxury taxes.

Labor-intensive businesses with more than 300 employees in such sectors as agriculture, seafood, garment and footwear will also be eligible for the tax relief.

The economy grew 4.66 percent in the three months to June from a year earlier, and Deputy Prime Minister Vu Van Ninh has said full-year expansion may fall below the government's 6 percent target.

ANZ said in a report last Thursday that Vietnam remains on a moderate growth path as both domestic and external demand indicators remained weak.

The bank said it expects growth to pick up in coming months, but noted that "the downside risks to growth are increasing."

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The new decree also approves personal tax exemption from July 1 until the end of the year for people with a monthly income of less than VND9 million (US$440).

This income group currently pays a 5 percent tax on their income after claiming a personal deduction of VND4 million per month.

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