Tax reduction alone is not enough, compliance costs still create great pressure
At the regular Government meeting on August 3, the Prime Minister assigned the Ministry of Finance to study tax policies to support small and medium-sized enterprises, individuals, and business households; soon propose amending the Corporate Income Tax Law in the direction of reducing taxes for this group as early as 2026. At the same time, study mechanisms to encourage business households to transform into enterprises.
This policy is expected to help reduce costs, create more resources to maintain and expand production and business.
As a business owner selling goods on e-commerce platforms combined with traditional stores in Hanoi, Ms. Nguyen Thu Huong informed that revenue is about 3 billion VND/year, but profit is insignificant after deducting raw material, labor, transportation, advertising and operation costs.
According to Ms. Huong, business households not only need to reduce taxes but also need to reduce compliance costs such as invoices, accounting, software and tax declaration. If errors occur, the cost of remediation or penalties can account for up to 1/3 of the monthly profit.
Ms. Huong proposed reducing taxes for small-scale business households, while simplifying procedures to reduce costs and create motivation for development.
Sharing the same expectation, Mr. Tran Minh Duc - owner of a production household in Hanoi - said that tax reduction is necessary, but what business households find most difficult currently is accounting procedures, which are quite complicated for small-scale business households.
In my opinion, the first thing to change is to simplify the accounting process. Business households only need to fully record input and output transactions and keep invoices and documents, while the synthesis and calculation should be automated" - Mr. Duc proposed.
In addition, Mr. Duc also proposed standardizing electronic invoice data so that devices or software can automatically scan and record information, thereby reducing manual data entry operations, limiting errors and significantly reducing compliance costs for business households as well as small businesses.
Businesses need more room for reinvestment and development
Not only business households, many small-scale businesses also assess compliance costs as a major pressure.
Mr. Le Quoc Minh - owner of a commercial enterprise in Hanoi - shared that although the scale is still small, enterprises still have to fully implement regulations on accounting, insurance, declaration and tax finalization like large enterprises.
Revenue is only equal to or slightly higher than some business households, but the cost to maintain a law-abiding apparatus is much higher. Businesses have to both hire accounting services and spend a lot of time on administrative procedures. For small businesses, this is not a small pressure" - Mr. Minh said.
According to him, in addition to reducing corporate income tax, management agencies also need to study a more appropriate management mechanism for micro-enterprises to reduce compliance costs and create conditions for businesses to focus on production and business activities.
Expressing expectations about the Prime Minister's direction, Mr. Le Van Tuan - Director of Tax Accounting of Keytas - said that this is a very timely policy in the context that small and medium-sized enterprises, business households, and individual businesses are facing many difficulties, even having to narrow down their operations. Currently, newly established enterprises are exempt from corporate income tax in the first 3 years of operation, this is a practical policy to help people have more motivation to start a business. In addition, enterprises converted from business households are also exempt from tax for 2 years to encourage households to convert to business models.
I think that we should consider allowing businesses converted from household businesses to also enjoy tax exemption incentives equivalent to newly established businesses. This policy will create synchronization and increase motivation for household businesses to boldly transform into business models" - Mr. Tuan proposed.
In the long term, according to Mr. Tuan, the important thing is not only to reduce taxes but also to sharply reduce compliance costs, build a transparent, stable and more suitable legal environment for the scale of small businesses and household businesses.
