SMEs enjoy 30 percent tax windfall

The Ministry of Finance has announced a decision to reduce the amount of corporate income tax paid by small and medium-sized enterprises (SMEs) by 30 percent, to ease the impact of the ongoing global economic downturn.

SMEs that have charter capital of 10 million VND or less and a maximum of 300 employees, will be eligible for this reduction in Corporate Income Tax (CIT), beginning in the fourth quarter of 2008 and continuing throughout the whole of 2009.

SMEs that qualify for other CIT benefits would also be eligible for this new reduction as long as they meet all of the requirements to do so.

A circular, dated January 13, stipulated the CIT rescheduling period for these enterprises.

The Finance-Monetary Department of the Ministry of Planning and Investment estimated the total quarterly CIT revenue at 170 trillion VND. A cut of 30 percent will lead to quarterly losses of some 20 trillion VND in tax revenues from the State budget.

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