Hanoi (VNA) – Experts have called for a shift from business support to policies that encourage private enterprises to invest and expand, strengthen their competitiveness, and make greater contributions to the national economy.
Improving cash flow and building reserves
In the face of soaring input costs, the Government and National Assembly have introduced tax and fee extensions and reductions to help private businesses sustain business operations.
Notably, the National Assembly’s Resolution No. 43/2026/QH16 provides a 30% reduction in personal and corporate income taxes for business individuals and small enterprises with annual revenue of up to 10 billion VND (nearly 390,000 USD) in 2026–2027. This policy is described as a timely “lever” to support small-scale firms and traders.
Economic expert Assoc. Prof. and Dr Ngo Tri Long said the tax cuts will improve cash flow and provide small businesses with additional working capital without incurring borrowing costs, particularly as access to affordable credit remains difficult.
The savings could be used to purchase materials, pay wages, upgrade machinery and expand operations. Although initially reducing state budget revenue, the policy could generate wider economic benefits through increased business activity and subsequent tax revenues.
Long added the policy could also encourage business households to formalise as enterprises. From 2026, tax administration for business households has shifted towards declarations, e-invoices and data-based management. Those with annual revenue of up to 1 billion VND are exempt from value-added and corporate income taxes.
Mac Quoc Anh, Vice Chairman and Secretary General of the Hanoi Association of Small- and Medium-sized Enterprises, said tax reductions directly improve cash flow and help businesses accumulate capital. Even modest savings could make a significant difference to micro and small enterprises, enabling them to maintain and expand operations.
Building a more competitive business community
Anh noted that SMEs account for more than 97% of businesses nationwide but continue to face constraints in capital, markets and resilience to cost fluctuations. Many have orders and growth opportunities but lack the resources to expand. The 30% tax reduction therefore provides additional capital without requiring bank loans, while boosting business confidence and encouraging investment.
However, policy effectiveness should be measured not only by tax savings but also by business survival rates, jobs retained, additional investment and revenue growth. The measure also reflects the State's commitment to sharing resources with businesses and supporting private-sector development.
Going forward, policies should move beyond helping businesses overcome immediate difficulties to encourage substantive investment, innovation, job creation, transparency and higher productivity. This will help build a more competitive business community capable of making greater contributions to the national economy beyond the 2026–2027 support period.
Do Van Dung, Director of Thanh Phat Co., Ltd. in Hanoi, said every cost saving is important to small enterprises seeking to maintain operations, improve cash flow and accumulate investment resources. He expected the 30% tax reduction to ease immediate financial pressure while encouraging technological innovation, higher productivity and market expansion.
According to Dung, the SME community has welcomed recent support measures, particularly tax and fee reductions, which have helped businesses retain workers, develop new products and improve competitiveness.
Clear implementation guidelines and simpler tax procedures are also essential to helping businesses plan for long-term growth, he continued.
He added that alongside tax incentives, better access to bank credit and production premises, as well as lower logistics costs, will further improve the effectiveness of support policies and promote business expansion./.
VNA
