Vietnam Reduces SME Tax by 30 Percent

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Jan. 16 – The Vietnamese government has announced that it would cut corporate income tax for small- and medium-sized enterprises (SMEs) by 30 percent starting from the fourth quarter of 2008 throughout this year.

The Ministry of Finance said SMEs in the doing business in the agricultural, seafood, textiles and garments, footwear and electronic industry would be qualified for the tax cut.

SMEs should have a chartered capital of not more than VND10 billion or have less than 300 employees. Of Vietnam's 300,000 listed companies, 96.5 percent of these qualify for the SME status. SMEs are estimated to contribute 40 percent of the country’s gross domestic product and 17.46 percent of the budget revenues. More importantly, SMEs provide more than 50 percent of the country's jobs.