Household business costs have increased sharply.

Many businesses are worried about rising costs as well as the risk of penalties related to taxes.

Increased compliance costs

The Vietnam Private Sector Economic Report, recently published by the Vietnam Chamber of Commerce and Industry (VCCI), contains several noteworthy pieces of information related to household businesses.

The survey, conducted nationwide by VCCI from February to April, collected responses from over 1,000 active household businesses in 34 provinces and cities. The results showed that household businesses have many concerns regarding tax policy compliance. Specifically, over 71% of households are worried about complex procedures. Next is concern about the risk of penalties, at 68.3%. The report also clearly indicates that concerns about high compliance costs are present in approximately 63-64% of households, and are significantly higher in the group with annual revenue of 500 million VND or more. Concerns about a lack of technological skills and guidance are more common among older household heads, those with lower education, and those in disadvantaged areas.

In fact, many household businesses have experienced a significant increase in costs when declaring and paying taxes based on revenue. Ms. NH, a garment and clothing business owner in Tan Binh Ward (Ho Chi Minh City), shared that previously, she paid a fixed tax of over 1 million VND per month, equivalent to about 10 million VND per year. Adding the business license tax of 1 million VND per year, her total tax payment was approximately 14 million VND per year. At the beginning of 2026, when she switched to declaring revenue, due to unfamiliarity with the forms and procedures, she had to hire an accounting service to handle it for her at a cost of 3 million VND per month. Thus, the cost for the whole year would reach 36 million VND, more than double the amount of tax she had previously paid.

Many business owners are worried about the costs and risks of penalties related to taxes.

Photo: Ngoc Duong

Similarly, although businesses with revenue under 1 billion VND are exempt from tax, Ms. TN, the owner of a grocery store at her home in Hoa Hung Ward (Ho Chi Minh City), still has to hire a tax declaration service at a cost of 1 million VND per month, equivalent to 12 million VND per year, whereas previously she paid a flat tax of only over 500,000 VND per month (over 6 million VND per year). "My household is exempt from tax, but keeping track of when to declare, notify, and update changes with the tax authorities is quite complicated, so I have to use an external service. I also have to spend an additional 2 million VND to buy invoice generation software because some customers need it… All in all, the costs related to tax payment have increased significantly compared to before," she said.

According to lawyer Tran Xoa, Director of Minh Dang Quang Law Firm, many small retailers, food and beverage businesses, grocery stores, and online businesses have almost no knowledge of accounting or tax declaration. Many older households and traditional businesses that previously only needed notebooks or simple record-keeping are now required to use software for electronic invoices, digital signatures, data connectivity, and online tax declarations, resulting in increased equipment and software costs and dependence on external service providers. This is especially true in traditional markets or small-scale areas, where the pressure is immense. Therefore, the compliance costs for most households will increase, not just in taxes, but also in the cost of purchasing computers, software, digital signatures, hiring accounting personnel, and outsourcing services.

Notably, for many households, the initial accounting and tax procedures will take a significant amount of time and effort. If converted to working hours, this cost could be even higher than before.

The risk of being penalized also increases.

The VCCI survey results also clearly show that up to 68.3% of surveyed businesses expressed concern about the risk of being penalized while complying with tax policies. Among these, the risk related to electronic invoices is very high because businesses find it difficult to collect customer information and are prone to errors during the process, lacking knowledge of correcting incorrect invoices and technical handling skills.

Lawyer Tran Xoa pointed out that household businesses (HKD) are often not worried about being accused of "tax evasion," but rather about making procedural mistakes. For example, issuing invoices at the wrong time, with the wrong tax code, missing details, incorrect daily revenue, or forgetting to issue invoices can all result in penalties. Many fear that even a simple mistake will lead to a fine. Furthermore, with the increasing requirement for cashless payments and the adoption of electronic invoices, interconnected bank data, and e-commerce platforms sharing data, many households worry that their entire revenue will be visible, leading to back taxes, tax adjustments, or frequent inspections. Household businesses, in particular, often lack a legal department, making them very anxious when dealing with regulatory agencies.

"Even households that didn't intentionally evade taxes are more worried now that they have to explain everything, as things used to be simple. Household businesses often don't keep up with the law, so they easily miss new regulations or learn about them too late. Furthermore, tax documents are often long, contain many technical terms, and have overlapping references, causing households to misunderstand or misinterpret them. Commonly, there's a fear of being penalized even for unintentional violations, while the penalties related to invoices, late tax declarations, and technical errors can be quite large compared to the income of small households...", lawyer Tran Xoa further analyzed.

Reduce the complexity of tax and accounting regulations.

According to the Vietnam Chamber of Commerce and Industry (VCCI), in the coming period, priority should be given to reducing the complexity of tax, accounting, and electronic invoice regulations to better suit the practical capabilities of household businesses, especially micro-enterprises, those with low education levels, and the elderly. In addition, it is necessary to develop low-cost and easy-to-use compliance support tools, such as simple accounting software, clear and understandable declaration guidelines, and direct local support mechanisms, instead of assuming that the majority of household businesses can absorb new regulations on their own without intermediary support.

Sharing the same view, Mr. Nguyen Ngoc Tinh, Vice Chairman of the Ho Chi Minh City Tax Consulting and Agency Association, also believes that for household businesses, the risks associated with issuing invoices when revenue exceeds 1 billion VND are quite significant. These include potential penalties for issuing invoices at the wrong time, or for incorrect information on invoices such as failing to ask the buyer for their tax identification number. Furthermore, many households are unsure whether to declare taxes monthly or quarterly, and are unable to compile and determine deductible expenses for tax declaration (especially for households with annual revenue exceeding 3 billion VND).

Another risk is that with payments received via bank transfer, many households find it difficult to distinguish between business expenses and personal family expenses, leading to potential errors in compiling and declaring revenue and related expenses. Therefore, to mitigate this risk, households often resort to using professional accounting services or hiring qualified personnel to handle tax declarations, which further increases compliance costs.

Mr. Nguyen Ngoc Tinh emphasized that while tax policies for household businesses have changed, the actual resources of this group remain unchanged. Households that used to consist of single individuals or a married couple are now doing the same, leading to increased compliance costs and higher risks of penalties. Therefore, in addition to the policies already supporting household businesses, tax authorities need to continue providing timely advice to help them adapt. Simultaneously, a separate penalty mechanism tailored to this group should be considered, as tax leaders have previously stated that penalties for household businesses will not be increased in the initial stages.

Source: https://thanhnien.vn/chi-phi-ho-kinh-doanh-tang-manh-185260519220242954.htm