Prime Minister says tax threshold for household businesses must be raised to 1 billion VND per year

The Prime Minister, citing a report from the Ministry of Finance, said the revenue threshold for individuals and household businesses is expected to be raised to 1 billion VND per year.

On the afternoon of April 21, the National Assembly discussed in committee draft laws to amend and supplement provisions of the Personal Income Tax Law, Value-Added Tax Law, Corporate Income Tax Law, and Special Consumption Tax Law.

Government rationale and legislative focus

In the committee discussion, Prime Minister Lê Minh Hưng emphasized that adjusting and supplementing the program at the first session is necessary to address major, urgent issues, including proposed amendments to four tax laws.

He said the move also aims to build a business environment in which people and businesses trust that the State, from central to local authorities, will genuinely remove long-standing obstacles.

Agreeing with deputies’ views, the Prime Minister noted that some contents must be addressed quickly, including personal income tax, value-added tax, and special consumption tax.

Current legal basis and need for adjustment

According to the Prime Minister, as of December 10, 2025, the National Assembly passed Personal Income Tax Law No. 109 and Value-Added Tax Law on December 11, 2025—both described as very new laws.

He said that, given current practical developments—especially the impact of fuel prices and regional dynamics—these changes directly affect groups that should receive priority, including small and medium-sized enterprises, individual households, and household businesses.

The Government leadership therefore directed the Finance Ministry to study options and report to the National Assembly.

“We have also reported to seek the opinion of the Chairman of the National Assembly, requesting permission for the Finance Ministry to study and, if feasible, to propose in this session for the National Assembly to consider adjustments. We fully agree that the draft should be adjusted toward raising the tax threshold,” the Prime Minister stressed.

Expected threshold and policy effect

Citing the Finance Ministry’s report, the Prime Minister said the threshold for individuals and household businesses is expected to be raised to 1 billion VND per year. He added that below this level, individuals and household businesses would not be subject to VAT and personal income tax.

He said the policy is intended to ease burdens for households and household businesses while supporting small and medium-sized enterprises to ensure fairness in tax policy and encourage individuals to transition to small and medium-sized enterprises.

The Prime Minister also said the measures, if implemented promptly, are expected to be useful and effective for household businesses, self-employed individuals, and SMEs, while maintaining the aim of encouraging household businesses to upgrade to a corporate form.

Implementation and safeguards against loopholes

The Prime Minister stressed that when designing and assigning specific tax rates to the Government, the proposal will be reported to the National Assembly to establish strict criteria and principles to avoid loopholes that could erode tax revenues.

He said the Government is modernizing the tax administration system and increasing the use of science and technology in tax collection, and that these goals must be codified in clear government decrees to take effect once the National Assembly approves the laws.

Due to the tight timeline, the Finance Ministry’s agencies are currently finalizing draft guiding decrees. After the National Assembly approves the policy, the Government will issue them promptly to ensure the law takes effect.

The progress of legislative work by ministries and agencies under the Government will be published on the Government’s electronic information portal so ministers and heads of agencies can track regulatory areas that are behind schedule.

Reported by Thuỳ An