The Vietnamese government is preparing tax relief measures for certain businesses, companies, and organizations. Under the proposal, eligible taxpayers would receive an income tax reduction of up to 30%.
The incentive is designed to apply for two years, covering the 2026 and 2027 tax years. The proposed tax policy changes were submitted by Vietnam’s Ministry of Finance to the National Assembly on August 21, 2026, during the first extraordinary session of the 16th legislature.
According to reports by The Star and Vietnam News on Monday (Aug. 24, 2026), one of the proposed measures would provide a 30% income tax discount to individuals operating businesses with annual revenue of no more than 10 billion Vietnamese dong (approximately US$ 382,500).
The same scheme would apply to companies and organizations with annual revenue of up to 10 billion Vietnamese dong during the 2026-2027 period.
Tax-Free Income Threshold to Be Raised
In addition to offering a tax reduction, the Vietnamese government also plans to revise the tax-free income threshold for household businesses and individuals. Under the Ministry of Finance’s proposal, the threshold would be doubled from 500 million Vietnamese dong, or approximately US$ 19,125, to 1 billion dong, or around US$ 38,250.
The government has also proposed raising the revenue threshold for individual taxpayers and household businesses eligible to calculate their tax liability based on a percentage of revenue. The threshold would increase from 3 billion Vietnamese dong, or approximately US$ 114,750, to 10 billion dong, or around US$ 382,500.
The changes are primarily aimed at easing the tax burden on household businesses, sole proprietors, and small and medium-sized enterprises (SMEs).
Easing the Burden on Small Businesses
Vietnamese Finance Minister Ngo Van Tuan said the measures were being prepared in response to the pressures faced by small businesses in maintaining production and business activities.
According to the government, reducing the tax burden would give small businesses greater flexibility to keep their operations running.
“These tax cuts are aimed at easing difficulties and stabilizing production and business activities for small enterprises,” Ngo Van Tuan said.
The policy is not solely intended to support businesses. The Vietnamese government also sees tax incentives as one of the instruments to maintain macroeconomic stability and help contain inflationary pressures.
Lower tax liabilities could also leave businesses with more funds to support their operations. The additional funds could be reallocated toward working capital, inventory purchases, equipment or machinery, employee retention, and business expansion.
Tax Revenue Could Decline
On the other hand, the policy would have implications for government revenue. Lower tax payments by taxpayers would inevitably reduce government receipts from taxation.
Vietnam’s Ministry of Finance estimates that the policy would reduce government revenue by approximately 3.19 trillion Vietnamese dong, or around US$121.98 million, in 2026.
The impact is projected to continue into 2027. In that year, the potential decline in tax revenue is estimated at around 3.51 trillion dong (US$ 134.27 million).
Despite the expected decline in revenue, the government considers the incentives necessary to support the sustainability of small businesses and maintain production and economic activity. If approved by the National Assembly, the policy would form part of Vietnam’s fiscal strategy to stimulate business activity while maintaining national economic stability.
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