Abolishing lump-sum tax: Business households enter a new game

From January 1, 2026, nearly 3.7 million households and business individuals will no longer pay business license fees, and the application of the lump-sum tax method - a form that has existed for more than three decades - will end.

Support for tax declaration and submission at the one-stop department at the Pho Yen - Phu Binh Regional Tax Department, Thai Nguyen province. Photo: Danh Lam/VNA

This is an important content in Resolution No. 68-NQ/TW of the Politburo on private economic development, and is also specified in Resolution 198/2025/QH15 of the National Assembly on a number of special mechanisms and policies for private economic development that has just been passed.

Accordingly, individuals and organizations will fulfill their tax obligations in accordance with the provisions of the Law on Tax Administration, in the form of declaration and self-responsibility before the law.

Previously, most small-scale businesses and individuals only recorded simple data by hand, so the lump-sum tax form was suitable for the early stage of the market economy , when most small-scale businesses were not yet qualified to apply technology or systematic accounting. However, in the context of the economy shifting strongly towards digitalization and integration, lump-sum tax revealed many shortcomings such as lack of transparency, budget loss and inequality between business households and enterprises.

Along with that, the abolition of lump-sum tax also creates motivation for businesses to innovate and develop, towards the goal of 2 million businesses by 2030 as set out in Resolution 68. Therefore, from the beginning of next year, instead of lump-sum tax, business households and individuals will switch to electronic tax declaration with clear invoices and documents. This roadmap has shortened by half a year compared to the original plan.

Data from the Tax Department shows that as of March 2025, nearly 2 million households nationwide were paying lump-sum tax, but only about 6,100 households applied the declaration method. On average, each business household paying lump-sum tax only paid about VND 670,000/month, while the declared tax amount was up to VND 4.6 million/month, nearly 7 times higher. This difference causes unfairness in tax obligations between business models with the same revenue scale.

The Ministry of Finance is currently rushing to complete the technology and legal systems to ensure the transition process is synchronous and smooth. The tax authority will deploy simple, free tax declaration software - suitable for non-accountants or non-technologists, while promoting training and guidance for business households to declare in accordance with regulations.

Deputy Director of the Tax Department, Mr. Mai Son, said that the free accounting software for business households has been directed by the Ministry of Finance to be deployed synchronously, linked with applications for declaration, submission and data sharing. This creates conditions for business households to easily create declarations, check, compare information and declare in accordance with regulations.

Although agreeing with the policy, many small business households and individuals are still worried about having to change their habits, adapt to the electronic declaration process, use software, issue invoices... tasks that are unfamiliar to small businesses.

Ms. Hoang Thuy Khanh, a restaurant owner in Hanoi, shared that paying lump-sum tax is simple, but she still doesn't know if she has paid the correct amount of revenue. If she switches to declaration with software support, she will feel more secure because everything is clear. However, she also expressed concern because she doesn't hire an accountant and she herself is not familiar with technology. If she has to make invoices and declare monthly, it is easy to get confused. She hopes the tax department will provide specific, step-by-step instructions.

Ms. Tran An Vy, a clothing store owner in Hanoi, shares the same feeling. She has always been used to writing notes by hand and paying taxes at the end of the month. Now, having to make detailed declarations, use software, electronic invoices, etc. is a lot of pressure. But if she is given proper instructions and support, she will learn to do it, because business now requires a systematic approach to survive.

Chairwoman of the Vietnam Tax Consulting Association, Ms. Nguyen Thi Cuc, said that for this conversion to take place smoothly, there should be a transition period lasting from 6 months to 1 year for households to get used to the new process.

Ms. Nguyen Thi Cuc also recommended that business households can use the services of professional tax agents at reasonable costs and can declare, pay taxes, and work with authorities on behalf of the household. Currently, there are about 800 tax agents nationwide with practice certificates, ready to support business households and micro-enterprises in the transition process.

In addition, encourage households and individuals to use electronic invoices generated from cash registers, connect directly with tax authorities, easily control revenue, save time and operating costs. Currently, the Ministry of Finance has directed specialized units to review and complete financial support policies for business households to rent and buy accounting software and shared digital platforms, in order to reduce costs, promote digital transformation and improve transparency in management.

According to VNA

Source: https://doanhnghiepvn.vn/doanh-nhan/bo-thue-khoan-ho-kinh-doanh-buoc-vao-cuoc-choi-moi/20250604082924603