Parliament proposes raising the tax-threshold for household businesses to 3 billion dong per year, three times the Finance Ministry's proposal

On the morning of April 23, 2026, during the continuation of the first session, the National Assembly discussed in plenary the draft law amending and supplementing several provisions of the Personal Income Tax Law, the Value-Added Tax Law, the Corporate Income Tax Law, and the Special Consumption Tax Law.

Speaking on the discussion points, representative Nguyen Duy Thanh from Ca Mau Province said the draft law would empower the Government to set the threshold for tax-exempt revenue for individuals and household businesses under the VAT and personal income tax laws. He argued that such a provision would improve policy flexibility in practice given the wide diversity of household businesses.

Thanh noted that even within the food service sector, revenue can vary greatly between small neighborhood eateries and chain outlets in a large city. If the rule is fixed in law, it would be difficult to reflect price changes, inflation, or shifts in consumer behavior in a timely manner.

He also pointed out that the draft does not clearly specify adjustment options. In the January 20, 2026 session, the Economic-Finance Committee proposed studying a tax threshold for household businesses of around 2 billion dong to ensure fairness and practicality; Thanh proposed 3 billion dong.

Thanh said 3 billion dong spread evenly over 12 months would imply monthly revenue of about 250 million dong. After deducting costs (rent, interest, and labor), the profit would be around 10%, equating to about 20 million dong. For a family of four, he said this profit level would be very low.

Thanh cautioned that granting the Government authority to set a revenue threshold not taxed within a framework could lead to policy instability for taxpayers, particularly small household businesses that are sensitive to tax obligations.

Proposals on framework and adjustment principles

Thanh proposed two directions: first, to establish a fixed framework in law (for example, a minimum and maximum revenue exempt or taxed) to ensure stability; or second, to establish clear principles—such as per-capita income, living standards, or consumer price indices—to provide the Government with a basis to adjust transparently and predictably.

Need for quantitative criteria and review cycles

Thach Phuoc Binh from Vinh Long Province said the mechanism for determining the threshold is an important innovation. He noted that not fixing a specific revenue in law and leaving decisions to the Government based on socio-economic context, applying to individuals, household businesses, and enterprises, represents a significant institutional step.

However, Binh said the draft’s current qualitative basis lacks quantitative criteria such as the CPI, per-capita income, or base wages. He argued that explicit criteria would improve transparency and predictability for citizens and businesses.

In addition, he said there should be a defined review cycle for adjusting thresholds—such as every two years or when economic indicators move beyond defined thresholds—to avoid policy lag behind reality.

Binh also said the Vinh Long delegation proposed studying a unified revenue threshold across personal income tax, value-added tax, and corporate income tax for the same business size. He said unification would help citizens determine tax obligations more easily and reduce administrative costs for tax authorities.

Raising thresholds and preventing misreporting

Pham Van Hoa from Dong Thap Province supported raising the tax threshold for household businesses, saying raising it to 1 billion dong per year would help spur production and business. He also warned that tax officers should monitor and admonish to prevent misreporting, noting that some entities declare revenue below 1 billion dong while actual revenue is higher.

The discussion also included broader commentary on tax policy, along with a reference to the original broadcast by VTV.