Key financial laws aim to drive institutional reform and growth

Key financial laws aim to drive institutional reform and growth

Key financial laws passed by the National Assembly underscore a strategic vision to complete a comprehensive financial institutional framework, unlocking resources, and building a synchronised legal corridor for the country’s next phase of development.

The Presidential Office held a press conference on July 11 to announce laws adopted at the ninth session of the National Assembly’s 15^th Legislature, which concluded on June 28.

Among them were the Law on Special Consumption Tax, Law on Management and Investment of State Capital in Enterprises, Law on the State Budget, and the Law on Corporate Income Tax.

At the event, Deputy Minister of Finance Le Tan Can presented the key changes and implications of each law.

He noted that the Law on the State Budget was developed in close alignment with the resolutions and conclusions of the Party Central Committee and the Politburo.

It supports institutional restructuring, the implementation of a two-tier local government model, and the promotion of science, technology, innovation, and national digital transformation.

Tax incentives aim to support business development

The law strengthens decentralisation and delegation of authority, especially through a revamped mechanism for budgetary allocation and management- to ensure the central government’s leading role while empowering local budgets with greater autonomy.

A fundamental reform in this law is the comprehensive revision of revenue distribution mechanisms between central and local budgets. It grants local authorities more flexibility and autonomy in budget planning, adjustments, and the use of surplus revenues.

Additionally, local governments are given greater authority to enact fees and charges and decide on budget expenditure regimes suitable to local realities.

This reform aims to eliminate the ‘ask-give’ mechanism, remove procedural bottlenecks, and promote transparency and accountability.

Another notable innovation is the inclusion of provisions prioritising budget allocation for science, technology, innovation, and digital transformation, which were recognised as key drivers of future economic growth.

Regarded as a significant breakthrough for the state-owned enterprise (SOE) sector, the Law on Management and Investment of State Capital in Enterprises expands its scope beyond wholly state-owned enterprises to include state-owned credit institutions with more than 50 per cent state capital, and organisations managed by political and socio-political bodies.

The core principle of the law is to empower the state as the capital owner to exercise its rights similarly to other investors, while granting enterprises greater autonomy.

Under the law, SOEs are authorised to develop their own 5-year and 10-year development strategies and annual business plans.

The members' councils or company chairpersons may independently decide on capital mobilisation strategies and are accountable for performance. They are also given broader authority to decide on investments.

Businesses are also granted the right to approve their own annual financial statements and make independent decisions regarding salaries and bonuses.

This represents a major step forward in unlocking resources, enhancing self-reliance and accountability, minimising unnecessary administrative interference, and boosting the competitiveness and leadership role of the state-owned economic sector.

Meanwhile, the Law on Corporate Income Tax continues to refine the legal framework, reaffirming Vietnam’s commitment to international integration and adaptation to the global minimum tax environment.

The law introduces provisions to expand tax collection from foreign enterprises engaged in e-commerce and digital platform businesses in Vietnam.

It also revises taxable and tax-exempt income categories to support priority sectors such as carbon credits, green bonds, scientific research, and innovation.

The law updates and tightens eligibility criteria for corporate income tax incentives to focus on high-priority sectors while eliminating inefficient and broad-based incentives.

Furthermore, new regulations aim to encourage enterprises to increase contributions to the Science and Technology Development Fund, and prioritise expenditures related to emission reductions and carbon neutrality, aligned with Vietnam’s green and sustainable development commitments.

Also in the tax sector, the Law on Special Consumption Tax reflects Vietnam’s policy direction to regulate consumption behaviour, protect public health, and align with international practices and integration commitments.

The law increases excise tax rates and sets a phased roadmap for alcohol and tobacco products.

It also expands the taxable base by including new products such as high-sugar beverages and introduces fixed excise rates on tobacco.

Under the new law, products like sugary drinks, alcoholic beverages, and tobacco will face higher tax rates following a planned schedule. This aims to encourage healthier consumption choices, steer production towards more sustainable practices, and generate additional budget revenue for reinvestment in public health and education.

VIR