Japan's Corporate income tax and lessons for Vietnam

Abstract

Corporate income tax (CIT) plays a crucial role as an instrument for managing and regulating national economic activities. In Vietnam, CIT not only contributes to maintaining the stability of the state budget but also upholds social equity through the fulfillment of tax obligations. Over recent decades, Vietnam’s tax reform initiatives have focused on enhancing the system by lowering tax rates, reducing tax exemptions, and harmonizing tax incentives across different economic sectors. These reforms are designed to stimulate investment, ensure competitive neutrality, and promote sustainable economic growth. Japan, as one of the world’s leading and most advanced economies, established its corporate income tax framework relatively early. Through continuous policy adjustments and improvements, Japan has achieved remarkable effectiveness in the enforcement of corporate income tax laws. The success of Japan’s tax system provides valuable insights for developing economies such as Vietnam, where improving tax efficiency and equity remains a national priority. Therefore, conducting a comparative analysis of Japan’s corporate income tax system and proposing relevant policy recommendations for Vietnam is both timely and necessary in the context of Vietnam’s current phase of global economic integration and development.