Proposal to raise the annual taxable revenue threshold to 2 billion VND sparks debate over impact on small traders

Proposal to raise the annual taxable revenue threshold for household businesses to 2 billion VND is drawing attention from many quarters. From the realities of daily trade to expert perspectives, the issue is not only about the figure but also how to design policies that are fair, transparent, and aligned with everyday life. The idea that 2 billion dong is not large is highlighted, with the threshold expected to ease the burden on small, informal traders. However, for those who earn their livelihood at street markets, the figure may not fully reflect real conditions. Hawkers such as a long-time An Dong market vendor in Ho Chi Minh City argue that revenue of 2 billion per year translates to about 166 million per month, roughly 5.5 million per day, which may not represent the true margins on many products. They point out that even seemingly small profits must cover electricity, water, rent, family living expenses, and possibly insurance; hiring staff could erode margins, making a gross-revenue tax approach potentially unfair to small traders. The complexity of receipt and invoicing rules is also a concern, with risks of double taxation if procedures are not followed. Proponents say increasing the threshold to 2 billion per year could relieve small traders, but some fear it may still not reflect reality for those who earn a living in markets. Many voices advocate allowing hawkers to choose between tax on revenue or tax on profit after costs, arguing that policy must reflect the actual thin margins of small businesses to ensure fairness and livelihood protection. Expert observers note that the change is a positive signal and emphasizes tuning policy to practical realities. Tax experts suggest basing thresholds on rigorous, science-based reasoning and ensuring alignment with salaried workers. For example, given current personal income tax allowances, to net about 20 million VND per month, a hawker with roughly 10% net margin would need about 2.4 billion VND in annual revenue, making the 2 billion threshold fairly reasonable and near the practical norm. As wages and personal deductions rise with inflation, the non-tax threshold for hawkers should rise accordingly to prevent unfair tax burdens and to promote transparency and fairness in tax policy. The discussion also highlights the need to differentiate between income tax and value-added tax, as mismatches could cause price and competitive imbalances if rules are not clearly defined. Read more links follow.