Need to recalculate taxable revenue threshold

Currently, business households and individuals perform tax obligations according to the lump-sum tax method, which means they determine their own revenue and pay tax according to that level. However, the new collection method requires business households to declare according to actual revenue, not applying lump-sum tax.

Specifically, according to the draft Law on Personal Income Tax (amended), the drafting agency, the Ministry of Finance, proposed raising the taxable revenue threshold of business households and individuals from the current level of over VND 100 million/year to over VND 200 million/year, applicable from 2026.

Discussing the draft Law on Personal Income Tax (amended) and the Law on Tax Administration (amended) at the 10th Session of the 15th National Assembly , many opinions said that it is necessary to carefully consider the taxable revenue threshold to focus on ensuring fairness. Analyzing this proposal more clearly, a National Assembly delegate gave an example: if a business household or individual achieves a profit of 10% on revenue and with a taxable revenue threshold of over VND 200 million/year, or VND 16.7 million/month, these subjects have to pay tax even though their profit is only over VND 1.6 million/month. This tax threshold is too low compared to the tax threshold for people with income from wages and salaries, which is being considered to be raised to VND 15.5 million/month, not including deductions for dependents.

Another opinion also said that the taxable revenue threshold of 200 million VND is not appropriate. Suppose an individual has a revenue of 200 million VND/year but the cost price is up to 180 million VND, then the actual profit is only 20 million. Therefore, if calculating personal income tax on the revenue is completely unreasonable. On the other hand, the new family deduction has been adjusted to 186 million VND/year, equivalent to 15.5 million VND/month for individuals and 260 million VND when there is an additional dependent, so the revenue must reach 2.6 billion VND to have a profit of 260 million VND to be subject to tax. That a business household can only make a maximum profit of 50% on revenue, so with the threshold of 200 million VND/year, individuals and business households only receive 7.8 million VND - not enough to cover the expenses of a family of 2-3 members.

From the above analysis, opinions suggest that it is necessary to recalculate the threshold of starting revenue to pay tax for individuals and business households. Accordingly, for service businesses that do not incur costs such as construction and materials, it can be at least 500 million VND/year, for other groups from 1 billion VND or more.

Faced with these concerns, Minister of Finance Nguyen Van Thang admitted that tax policies related to business households and individuals are extremely difficult and complicated issues. Tax collection from business households is not a new issue but has been implemented for many years, the way of calculating tax has not changed, only the collection method is different. There are shortcomings in the way of calculating tax threshold for business households, not creating fairness compared to workers with income from wages and salaries.

Therefore, according to Minister of Finance Nguyen Van Thang: the revenue threshold must be recalculated so that business households do not feel disadvantaged compared to the threshold for starting tax collection for salaried employees. We would like to accept this content to study to have a suitable starting tax threshold for business households.

According to preliminary statistics by the end of 2024, the country has about 3.6 million business households and individuals. The number of business households operating stably is 2.2 million; the number of households with revenue above the tax threshold currently applying the rate of 100 million per year is 1.3 million, accounting for 59% of the total number of households. Meanwhile, tax is the main source of revenue for the state budget, playing an important role in regulating the economy as well as ensuring resources for national development.

Paying taxes is not simply a mandatory obligation but a voluntary act, associated with the belief in fairness and transparency. Therefore, the tax threshold for households and individuals doing business needs to be carefully and thoughtfully studied to have a reasonable and harmonious tax rate, which is acceptable to the people. Thereby, it is possible to avoid budget losses while nurturing revenue sources, contributing to the growth of the private economy.

Source: https://daibieunhandan.vn/can-tinh-toan-lai-nguong-doanh-thu-chiu-thue-10396821.html