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The government has submitted to the National Assembly a draft law amending several provisions of the Personal Income Tax Law, the Value-Added Tax Law, the Corporate Income Tax Law, and the Special Consumption Tax Law. Regarding the draft, Prime Minister Le Minh Hung emphasized the principle that the tax burden must be raised by increasing the threshold for tax liability. According to the Finance Ministry, for individual household businesses, the threshold is expected to be raised to 1 billion VND per year — meaning revenue below that level would not be subject to value-added tax or personal income tax. Thus, the exemption threshold for household businesses could be twice the current level. In recent days, there have been numerous discussions among household businesses and small traders about taxes—from completing bank account notifications for electronic wallets and quarterly tax filings to using electronic invoices and the ongoing question of the exemption threshold. The proposal also highlights the challenge of administrative procedures and the risk of overly complex compliance. Mr. Nguyen Van Thuc, chairman of BCTC Tax Advisory Co., notes that raising the exemption threshold to 500 million VND from 2026 is a meaningful step but may still fail to fully reflect living costs and real business costs. Many household businesses are family-run, with both spouses working and no additional income. If the exemption threshold remains too low, they could end up paying taxes despite not earning a sustainable living. This year, the basic personal deduction for living costs has been raised to 15.5 million VND per month for the taxpayer and 6.2 million VND per month for each dependent. To ensure a minimum living standard, a household business would need income of about 21.7 million VND per month. With an assumed profit margin of 20%, annual revenue would need to exceed about 1.2 billion VND. Therefore, a threshold below this level would still tax many households that do not meet basic living standards. Additionally, applying a single threshold across all sectors is seen as a blunt instrument; some sectors become profitable at revenues of only a few hundred million VND, while others require several billion to become profitable. Mr. To Hoai Nam, Vice Chairman and Secretary General of the Vietnam Small and Medium Enterprise Association, says the biggest difficulty in policy design lies in the characteristics of the household-business sector. He argues that policies should not hinge on “whether you pay,” but rather on “how you pay,” with taxes designed to be simple and easy to comply with. The policy design for this area requires a tailored approach rather than a mechanical application of corporate rules, and the government’s revision aims to address those shortcomings. Read more: [updates on corporate financial results and related analyses]
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