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Prime Minister Le Minh Hung said the tax threshold for household businesses will be raised, with the Finance Ministry expecting it to reach 1 billion VND per year, double the current level. The statement was made during a group discussion on April 21 on the draft Law amending and supplementing several provisions of the Tax Laws covering Personal Income Tax (PIT), Value-Added Tax (VAT), Corporate Income Tax and Special Consumption Tax.
The Prime Minister said the PIT and VAT amendments were approved by the National Assembly at its December 2025 session. However, he noted that subsequent developments have made the current revenue threshold of 500 million VND inappropriate.
He cited that changes in fuel prices and regional developments directly affect the groups that the policy aims to prioritize, including individuals, household businesses and small and medium-sized enterprises (SMEs). The Government has therefore directed the Ministry of Finance to study the adjustment plan and seek the Speaker of the National Assembly’s permission to propose changes at the first session of the current XVI Legislature.
The Prime Minister affirmed that the tax threshold for household businesses “will surely be raised,” adding that the revenue threshold not subject to tax is expected to be 1 billion VND per year.
In earlier discussions, most delegates supported the tax reform to address urgent needs and ease difficulties for household businesses and SMEs.
Bui Xuan Hai, Rector of Hai Phong University, proposed that the draft law specify a concrete revenue threshold so households and individual businesses can clearly determine whether they will be exempt from paying taxes. He noted that the draft presented to the National Assembly proposes a threshold for revenue not subject to personal income tax “according to government regulation.” He suggested that if a specific number cannot be determined yet, the draft should not be amended in that direction. Instead, he proposed adding a sentence after the current figure of 500 million VND: “or another higher figure determined by the Government.”
Nguyen Thi Viet Nga, Deputy head of the Haiphong delegation, proposed that the Government establish criteria to determine the taxable revenue threshold for household businesses, such as minimum living standards, CPI fluctuations, industry characteristics, or tax compliance costs. She also warned about the risk of revenue splitting to avoid taxes. If the threshold becomes the basis for tax exemption, she said a single establishment could split into multiple households under family names to divide sales points, accounts, invoices, or even split transactions on digital platforms to keep revenue below the threshold.
To address this, she proposed criteria to identify cases of “the same location, same model, same supply chain or same actual manager” to aggregate revenue under an anti-splitting principle.
Nguyen Ngoc Son, a member of the Committee on Science, Technology and Environment, said that if policy design is not tight, it may both support growth and encourage the informal economy. He added that bookkeeping, deductions and invoicing would become more stringent. He warned that if the threshold remains for households, household businesses may neither pay tax nor bear high compliance burdens, which could create a “tax evasion zone” and discourage business owners from converting to a corporate model.
On these issues, the Prime Minister said that once the threshold is appropriately defined, the Government will report to Parliament the criteria, bases and principles to ensure strictness and close gaps in tax collection. He also noted that competent agencies of the Ministry of Finance are finalizing a decree to guide implementation of the new law, aiming to issue it promptly to align with the law once approved by Parliament.
According to the Ministry of Finance, during 2022–2025 Vietnam had 3–4 million household businesses, of which more than 2 million paid taxes regularly, contributing about 2% of total tax revenue. Last year, tax revenue from this sector reached 32,840 billion VND, up 37.5% year-on-year.
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