The National Assembly's discussion session on the afternoon of November 19 on the draft Law on Tax Administration (amended) and the Law on Personal Income Tax (amended) has had many opinions on the revenue of VND200 million/year to exempt tax for business households that are currently not keeping up with the increase in living and operating expenses. Many delegates said that if not adjusted, the policy will put great pressure on small households that have suffered many fluctuations after the pandemic.
In the draft, the Ministry of Finance proposes to exempt tax for business households with a revenue of less than VND 200 million/year. However, this level is causing much controversy when experts, National Assembly deputies and business households themselves believe that 200 million VND is difficult to accurately reflect market reality, especially in the context of raw material, premises and labor prices having increased sharply over the years.
According to calculations, a small-scale pho restaurant sells 80100 bowls a day for 35,00045,000 VND, with annual revenue reaching 400600 million VND. Similar calculations show that very few food, grocery or coffee households can maintain operations with a revenue of less than 200 million VND/year.
Mr. Do Dinh Hai, owner of a small noodle shop in Phu Dien (Hanoi), said that this threshold is "not practical". "A day I sell about 50 bowls of noodles, for 30,00035,000 VND. The total annual revenue is over 300 million. Profit is not much because prices have increased, but revenue exceeding 200 million is certain. If we keep this level, almost every household will have to pay taxes, he said.
In Hai Phong, Mr. Luu Van Thang, owner of a small grocery store in An Phong commune, said that the revenue of 200 million/year "is not large". "Just need to sell 17'20 million VND per month for goods that have exceeded the threshold. The real profit is only 1215%, while the tax contract is calculated based on revenue. The threshold is too low, which will put pressure on small households" - he said.
Many business households believe that if this tax exemption threshold is maintained, the policy will easily lose the focus of support and cause disputes about the contract level when implemented in practice.
Ms. Nguyen Thi Cuc - Chairwoman of the Vietnam Tax Consulting Association - said that the 200 million VND/year level is "no longer suitable" because statistics rely heavily on contract revenue, not reflecting the actual scale of business households today.
Ms. Cuc analyzed that if divided 200 million VND for 360 days, the average revenue would be less than 600,000 VND per day. With a bowl of pho costing 40,000 - 50,000 VND, just selling about 15 bowls a day will surpass this mark.
Ms. Cuc further explained: With a revenue of 1 billion VND per year, the average profit is about 16%, equivalent to 160 million VND, or about 13.3 million VND per month. This level is equivalent to the income of a public employee who is currently applying a family deduction of VND 15.5 million".
According to Ms. Cuc, the transparency of new revenue is the decisive factor in designing a reasonable tax exemption level. She cited some cases in Hanoi and Vung Tau that declared very low or undeclared revenue even though the actual revenue was up to hundreds of billions of VND, showing a large gap between real revenue and declared revenue.
