With a high approval rate, the National Assembly (NA) has officially passed the Law amending and supplementing several tax laws, removing the "fixed" VND500 million ($19,000) revenue threshold used as the basis for taxing household businesses.
The adjustment aims for greater flexibility, with the threshold expected to be raised to approximately VND1 billion ($38,000) to reflect economic realities, support household businesses, and ensure budget balance.
On the morning of April 24, the 16th NA officially approved amendments to several key tax categories, including Personal Income Tax (PIT), Value Added Tax (VAT), Corporate Income Tax (CIT), and Special Consumption Tax. The bill passed with overwhelming support, with 466 out of 488 deputies in attendance voting in favor.
The most significant change in this amendment is the removal of the "hard" revenue threshold for taxation from the text of the law. Instead, the NA has authorized the Government to proactively determine specific levels, allowing for better adaptation to the actual economic climate.
Previously, the taxable revenue threshold for household businesses was fixed at VND500 million per year. However, throughout its implementation, many experts argued that this figure was no longer appropriate, particularly given the need to create more favorable conditions for household businesses and small-scale enterprises.
In his explanation to the NA, Minister of Finance Ngo Van Tuan stated that delegating this authority to the Government does not alter the fundamental nature of the tax policy. Rather, it is intended to increase administrative flexibility while remaining compliant with constitutional principles.
Following feedback from deputies, the draft law was adjusted to include clear criteria for determining the tax-exempt revenue threshold. Specifically, these levels will be based on macroeconomic conditions and budget balance requirements to ensure feasibility during implementation, according to the finance minister.
Additionally, under the amended Personal Income Tax Law, household and individual businesses with annual revenues exceeding VND3 billion (nearly $114,000) will transition to a tax calculation method based on actual income. Furthermore, tax rates will be categorized by different revenue groups to ensure fairness across the board.
Google translate