Parliament removes the 500-million-dong taxable revenue threshold and grants government flexibility to adjust it

Flexible policy to reflect real-world dynamics In the context of a global economy that remains volatile and a private sector increasingly diverse in scale, Parliament's decision to drop the 500 million dong annual taxable revenue threshold and to give the government the flexibility to adjust it according to actual conditions sends a clear message: tax policy cannot stand still in the face of rapidly changing practical realities. Policy flexible to changes in practice Recently, the 500 million dong per year revenue threshold has been used as the basis to determine whether a household business must pay taxes. However, given the economy's changing dynamics, this threshold has shown its limitations. On one hand, 500 million dong no longer reflects the scale and profitability of many small businesses, especially in large cities where input costs and rental costs have risen significantly. On the other hand, anchoring a fixed threshold in law makes policy inflexible and unable to catch up with economic and social developments. Parliament's decision thus breaks a policy bottleneck. Instead of rigid rules in law, delegating the authority to the Government to adjust the taxable revenue threshold will allow the policy to adapt more quickly to realities. When the economy grows, inflation fluctuates, or the structure of household businesses changes, the Government can proactively adjust the threshold to an appropriate level, without waiting for a law amendment—which is a time-consuming process. Putting tax policy on a fairer footing The policy of flexible adjustment will widen the path for household businesses to upgrade to corporate forms. When tax policy is designed properly, transparently, and fairly, the boundary between households and enterprises will narrow, providing momentum for this sector to develop in a formal, sustainable manner. From a practical perspective, Mr. Nguyen Trong Ninh, Director of Bình Yên Investment and Production Joint Stock Company (Hoài Đức commune, Hanoi) says this decision opens opportunities to redesign tax policy toward households in a fairer direction. Instead of relying solely on revenue, authorities can consider other criteria such as profitability, industry, and workforce size to determine appropriate tax obligations. This will reduce a 'one-size-fits-all' approach and prevent some larger household businesses from 'hiding' behind small-scale status to obtain tax incentives. "Flexible adjustment of the revenue threshold also contributes to encouraging household businesses to transition to corporate models. When tax policy is well-designed, transparent, and fair, the line between household businesses and enterprises will gradually narrow, providing a motive for this sector to grow in a formal, sustainable manner", Mr. Nguyen Trong Ninh notes. However, to implement the policy, the key factor remains the implementation process. The government needs to build a clear roadmap, publicly announce criteria for determining the revenue threshold, and increase dialogue with the household-business community to build broad consensus. Tax administration must also be modernized, applying digital technology to reduce compliance costs and curb revenue losses. From rigid management to dynamic operation Parliamentarian Phan Thi Thuy Linh says that the revenue threshold is not just about a specific number, but about how to design policy. It should not be adjusted in small increments, but with a larger, mid-term, stable shift that demonstrates support and humanity. Tax policy should be viewed not only as a revenue tool but also as a policy instrument to support development. The rest of the article discusses further considerations about oversight, constitutional procedures, and monitoring of tax policy adjustments, emphasizing the need for transparency and a collaborative approach between government and the business community. "In this way, we can achieve the goal: maintain flexibility in policy while preserving transparency, stability, and the National Assembly's decisive role in tax policy," the article notes. In summary, removing the 500-million-dong tax threshold is not merely changing a number; it signals a shift in policy approach. If implemented effectively, it could lay the groundwork for a more equitable, transparent, and adaptable tax system in the face of future economic fluctuations.