The Department of Taxation under the Ministry of Finance should consider increasing the tax-exempt revenue threshold for business households to VND1 billion (approximately $38,000), said Chairwoman of the Vietnam Tax Consultants' Association Nguyen Thi Cuc.
"With a revenue of VND1 billion per year, if we estimate an average profit of about 15%, the net income of a business household would only be less than VND14 million (around $532) per month. Therefore, exempting this group of households with revenue under VND1 billion from tax is reasonable and feasible," Ms. Cuc stated at an event on October 23.
Currently, business households and individuals with an annual revenue below VND100 million (nearly $3,800) in a calendar year are exempt from revenue tax. Furthermore, according to the Value Added Tax Law, business households with revenue under VND200 million from June 1, 2026, will not have to pay VAT and personal income tax.
Consequently, the transition from lump-sum tax to declaration-based tax is an inexorable trend, aiming for fair and transparent tax management, while also creating conditions for the private economic sector to develop sustainably.
Sharing the policy's objective and the roadmap for accompanying business households as lump-sum tax is abolished, Mr. Mai Son, Deputy Director of the Department of Taxation, noted that historically, lump-sum tax was suitable when business households primarily engaged in small-scale trading, self-production, and self-consumption.
"However, with the development of the economy, the scale of revenue and business scope has increasingly expanded. Goods are not only produced domestically but also imported and transacted across borders. Maintaining the lump-sum tax format no longer meets the requirements for transparency and fairness."
Furthermore, Mr. Son affirmed that the tax sector would continue to review legal regulations to simplify administrative procedures, and concurrently build mechanisms to encourage business households to develop into enterprises to benefit from support policies, tax incentives, and better access to state resources.
According to data from the Department, 98% of declared business households now submit taxes electronically, over 18,500 lump-sum households have switched to declaration-based taxation, and 133,000 households have registered to use electronic invoices from cash registers. These figures demonstrate the positive transformation of the policy, as well as the quick adaptability and proactiveness of business households facing this period of significant change.
Ms. Cuc informed that tax authorities are currently soliciting opinions on raising the tax-exempt revenue threshold, but she proposed increasing this level to VND1 billion per year to align with current business realities.
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