During a recent session on the draft Law on the Development of Small and Medium Enterprises, lawmaker Trần Văn Lâm expressed concerns regarding the current policy that exempts small businesses from income tax for only three years from the date of their first registration. He argued that this timeframe is not suitable, as many businesses do not generate profits within this period and may find themselves without support just as they begin to incur tax obligations.

Lâm highlighted that the initial years of a business are often spent on investments in facilities, equipment, hiring staff, and market exploration. As a result, many companies may still be operating at a loss when the tax exemption period ends. He proposed that the tax exemption should be calculated from the first year a business generates taxable income, extending the exemption for three years from that point to ensure that support aligns with their capacity to pay taxes.

Similarly, Hà Thị Anh Thư, another lawmaker, raised concerns about the proposed three-year exemption starting from the registration date, advocating for a delay until businesses have taxable income to avoid premature expiration of benefits. Nguyễn Văn Huy, also a lawmaker, agreed that the timing of the tax exemption should be reconsidered, emphasizing the need for consistency across tax laws regarding tax rates and exemption periods.

The draft law also proposes that businesses with annual revenues of up to 10 billion VND can choose between calculating tax based on taxable income (revenue minus expenses) or a percentage of their revenue. Lâm noted that this policy could reduce compliance costs, particularly for small businesses transitioning to corporate status. However, he cautioned that the law should clarify how this aligns with value-added tax (VAT) regulations and accounting practices.

In response, Minister of Finance Ngô Văn Tuấn stated that the proposed support policies have been carefully considered to balance tax obligations with compliance costs. He pointed out that globally, many countries offer three years of support for startups, recognizing this as a critical period for new businesses. The draft law is expected to be presented to the National Assembly for discussion in October.