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On 21 April, the Minister of Finance Ngô Văn Tuấn, acting under authorization from the Prime Minister, submitted to Parliament a draft law amending several provisions of the Personal Income Tax Law, the Value-Added Tax (VAT) Law, the Corporate Income Tax Law, and the Special Consumption Tax Law. The draft aims to remove the specific annual tax threshold currently applied to households and individuals engaged in business, with the Government to determine the threshold going forward.
The draft proposes that there will be no specific threshold for taxable income or VAT exemption for households and individuals engaged in business. Instead, the Government would set the exact threshold.
Under the current law, the threshold for VAT and personal income tax on income of household businesses is 500 million dong per year. If the draft is enacted, the laws would no longer specify an explicit tax-exempt threshold for individuals or households in VAT and Personal Income Tax, and the Government would establish the threshold.
According to the Minister of Finance, the proposal is intended to support households, individuals engaged in business, and small enterprises to expand production and business activities. It also seeks to ensure fairness in income tax policy between households/individuals/businesses and small enterprises, while encouraging households and individuals to upgrade to corporate form.
The Minister of Finance also said delegating authority to the Government would create a legal basis for a more flexible fiscal policy, including tax policy. The draft is described as institutionalizing guidance referenced from the Politburo’s Conclusion No. 18, the Central Resolution No. 66, the Law on Organization of the National Assembly, and similar rules that delegate tax-related decisions to the Government under various laws and resolutions.
For the Special Consumption Tax on battery-powered vehicles with engines under 24 seats, the draft proposes extending the current tax rate policy through 2030. The stated objective is to maintain policy consistency with environmental protection and sustainable development, and to reduce urban pollution—particularly amid volatile fossil fuel prices and reduced fossil fuel supply.
Finance-Economy Committee Chairman Phan Văn Mai said most opinions support the Government’s proposal. However, he noted that the submission does not provide specific options for adjusting the revenue threshold relative to the current law, leaving the policy direction unclear.
The examining agency therefore requested that the Government provide clearer options to support discussion, and to study an appropriate revenue threshold to help develop households, individuals engaged in business, and small and medium enterprises.
Some opinions argued that defining the threshold in law ensures clarity and transparency. Others supported flexibility, suggesting the Standing Committee of the National Assembly should be able to adjust as needed.
On corporate income tax, most opinions agreed with the Government’s proposal. Some suggested specifying in law the revenue amount exempt from tax to improve transparency and to give the Standing Committee of the National Assembly the ability to adjust while maintaining flexibility.
Regarding excise tax for battery-powered vehicles, most opinions supported reviewing an extension of the current rate, but emphasized the need for careful consideration to balance objectives and interests.
The Government was also asked to supplement the report with environmental impact analysis related to battery-powered vehicles, highlighting both advantages and drawbacks to avoid a one-sided assessment.
After hearing the proposal and the accompanying review, Parliament will discuss the matter in committee. According to the agenda, it will vote to approve the law on the final day of the first session, April 24.
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