Minister of Finance talks about tax threshold for business households

On the afternoon of November 19, National Assembly deputies discussed in the hall the draft Law on Personal Income Tax (amended). In this amendment, the drafting committee proposed a revenue threshold for individuals and business households to pay personal income tax of 200 million VND/year. This is an issue that still has concerns among National Assembly deputies.

Bộ trưởng Bộ Tài chính nói về ngưỡng chịu thuế của hộ kinh doanh - Ảnh 1. — Delegate Nguyen Van Chi spoke at the discussion on the afternoon of November 19. Photo: Pham Thang

Regarding the regulations on income tax for individuals and business households, delegate Nguyen Van Chi ( Nghe An delegation) said that this draft law needs to assess more thoroughly the actual impact, especially in the context of the tax management method for business households changing from lump-sum tax to declaration based on actual revenue.

According to Ms. Chi, currently, business households have participated in health insurance, but have not participated in compulsory social insurance, which means they will not have a pension in the future and pose social security issues.

With the new tax management method from the beginning of 2026, business households' taxes are calculated based on actual revenue, determined through invoices and documents of goods and services transactions and compared with tax authorities. This helps determine revenue more accurately and collect taxes proportionally.

However, delegate Nguyen Van Chi was concerned about the taxable revenue threshold of 200 million VND/year as per the draft. According to her, this provision is similar to the value added tax threshold, helping to unify the laws.

However, in reality, 200 million VND is equivalent to a revenue of about more than 16 million VND per month. Assuming the average profit rate of a business household is only about 10%, then an income of only 1.6 million VND/month is subject to personal income tax, much lower than the personal income tax threshold for salaried employees which is currently 15.5 million VND/month, not including dependents.

Meanwhile, business households calculate directly on revenue without enjoying these exemptions and deductions. Thus, there is a difference and does not ensure equality between salaried employees and business households and individuals.

Regarding tax management methods, according to delegate Nguyen Van Chi, the shift from lump-sum tax to declaration based on actual revenue of business households is determined to be significantly higher than the previous lump-sum level. This leads to a tax burden for business households.

Meanwhile, this draft law has adjusted tax reductions for salaried workers and some high-income earners in the fields of science, technology, and innovation. On the contrary, households and business individuals have not received appropriate tax exemptions, causing the tax burden to increase significantly.

Therefore, delegate Nguyen Van Chi suggested that the drafting agency should assess the impact more carefully, ensuring the principle of equality between business households and salaried employees.

Delegate Tran Van Lam (Bac Ninh delegation) also expressed concerns about the VND200 million/year revenue threshold for business households. According to him, the revenue threshold also shows inequality in tax policy, which is what makes many business households hesitant when switching from lump-sum tax to revenue-based tax calculation method.

From there, the delegates proposed to review the starting taxable revenue and the tax rate applied to the direct tax calculation method on revenue for small businesses. "This is a key factor to create a fair business environment, encourage businesses to confidently transform, contribute to the overall development of the economy, in line with the spirit of the Party's Resolution" - delegate Tran Van Lam expressed his opinion.

Bộ trưởng Bộ Tài chính nói về ngưỡng chịu thuế của hộ kinh doanh - Ảnh 2. — Delegate Hoang Van Cuong. Photo: Pham Thang

Sharing the same concern, delegate Hoang Van Cuong (Hanoi delegation) said that the revenue threshold of 200 million VND is not appropriate. He cited an example of a person selling milk at a cost price of 900,000 VND/box and selling it for 1 million VND/box, thus making a profit of 100,000 VND/box.

If 200 boxes are sold, the revenue is 200 million, but the actual profit is only 20 million. While the family deduction for an individual is 186 million/year, if an individual plus one dependent is 260 million.

"Thus, the milk seller must sell 2.6 billion in revenue to get the difference of 260 million, and then they have to pay tax" - Mr. Cuong said. From there, the delegate proposed to change the level of determining the starting tax for business people, such as sellers, agents, the minimum starting level must be 1.5 billion VND/year. In some other fields, the starting level may be different but must be higher than 200 million VND/year.

Bộ trưởng Bộ Tài chính nói về ngưỡng chịu thuế của hộ kinh doanh - Ảnh 3. — Minister of Finance Nguyen Van Thang. Photo: Pham Thang

Speaking to explain and clarify the content raised by National Assembly deputies, Minister of Finance Nguyen Van Thang said that the shift from lump-sum tax to tax calculation based on actual revenue for business households has helped to limit huge tax losses, especially in developed economic areas.

According to the Minister, recently, after applying information technology to tax declaration, the amount of tax collected from the shift from contract to declaration has increased by 64%.

Regarding the tax rate, the draft increases the taxable revenue from 100 million VND to 200 million VND. The Minister said that it cannot be said that this draft law causes difficulties or disadvantages for business households. However, the Minister agreed with the delegates on the issue of tax fairness, it is necessary to ensure that the tax rate for business households is commensurate with the tax rate for salaried employees.

Minister Nguyen Van Thang emphasized the need for more careful research and calculation to determine the appropriate starting tax rate for business households to ensure that they are not disadvantaged compared to salaried workers.