Many positives in the new proposal
According to current regulations, business households with a revenue of less than VND 100 million/year are not required to pay taxes.
On October 6, 2025, the Ministry of Finance issued Decision 3389/QD-BTC on converting tax management models and methods for business households, stipulating the tax exemption threshold as below VND 200 million/year.
In the latest plan submitted to the Government, the Ministry of Finance proposed raising the tax-exempt revenue threshold to VND500 million/year, and at the same time only calculating tax on the revenue exceeding this threshold instead of above the entire revenue. The Ministry also proposed adding a mechanism for calculating tax based on income (revenue minus expenses), with a tax rate of 15%.
Reducing pressure on business households
Many business households assess the new proposal to significantly reduce pressure, but the impact depends on the industry, cost and actual profit margin.
Ms. Nguyen Minh Hang, owner of a grocery store in Lac Long Quan area (Hanoi) said that her annual revenue is about 600700 million VND, but the real profit is only 7080 million VND due to low interest rates and rapidly increasing input costs. With the old threshold of 200 million VND, she assessed that 500 million VND helped to "ake it much easier", but it was still not suitable for the reality of increasing costs.
"Gravity making is very thin, many months it only makes a profit. The 500 million VND threshold helps reduce pressure, but in my opinion, we should consider 700 million to 1 billion VND per year to be close to the endurance of today's business household," Ms. Hang shared.
Similarly, Mr. Le Van Phuc, owner of an electronic equipment repair shop in Cau Giay (Hanoi) said that the store's revenue is about 1 billion VND per year, but the cost of components, rental space and technology makes the profit "not much". According to him, the 500 million VND level helps reduce pressure compared to the previous 200 million VND level, but still does not accurately reflect the characteristics of the industry that requires high costs. I think increasing it to 1 billion VND/year will be more reasonable at this stage, said Mr. Phuc.
Need to consider additional State support factors for business households
Assessing the tax-exempt revenue threshold according to the new proposal of the Ministry of Finance, Mr. Le Van Tuan - Director of Keytas Tax Accounting Company Limited commented: "The tax-exempt revenue threshold of VND500 million/year proposed by the Ministry of Finance is that there is a department, but not enough".
According to Mr. Tuan, the level of 500 million VND/year proposed by the Ministry of Finance is built on three groups of facilities.
The first is the practical factor, based on the number of households and individuals doing business that the tax sector is managing. According to data from the Ministry of Finance, as of October 2025, the whole country will have more than 2.54 million regular business households, of which about 2.3 million households, equivalent to 90%, will not have to pay taxes if the threshold of 500 million VND/year is applied.
Second is to ensure relatively fairness in the collection of personal income tax on other types of income. Salary workers are deducted from themselves, dependents, insurance, health care, education... before calculating taxes.
Third is to ensure relatively fairness between non-taxable business individuals and taxable business individuals, including value added tax.
Mr. Tuan mentioned the case of a business household with a revenue of 1 billion VND, capital cost of 800 million and labor cost, other costs of 200 million VND, that is, no profit, no loss. This household does not have to pay personal income tax but must pay 10 million VND in VAT (1% on revenue).
With the new proposal, the revenue of 1 billion VND will be deducted by 500 million VND, the remaining 500 million VND is subject to a tax rate of 1.5%, equivalent to 7.5 million VND. This tax rate is almost equivalent to the VAT obligation that non-interest-bearing business households still have to pay, thereby creating more harmony in tax obligations.
However, according to Mr. Tuan, the Ministry of Finance has not mentioned an important factor, which is the level of State support for business entities. He said that to comprehensively assess the tax-exempt revenue threshold, it is necessary to consider the burdens that business households are suffering in the process of complying with tax laws.
Firstly, regarding the cost of tax compliance, the application of electronic invoices, money computers, accounting software, digital signatures... requires a large initial investment, about 20 million VND, not including annual maintenance costs.
Second, business activities have very high potential risks, Mr. Tuan cited the data of 9095% of startups who suffered losses and left the market after three years. Meanwhile, tax obligations still apply even when households suffer losses or break even. Therefore, the new threshold must clearly demonstrate the support of the State in the early stages of the startup process.
Third, considering the correlation between income groups, salary earners are not exposed to market risks, while business households have to bear fluctuations in costs and output. Mr. Tuan said that the threshold of 500 million VND is not certain to help business households achieve the same after-tax income as the group working for salary, while living expenses between groups are similar.
Fourth, compared with some countries in the world, Mr. Tuan commented that Vietnam's support level for business households is still low compared to some countries with similar development levels.
If calculated correlated with GDP per capita and tax-free revenue, Thailand is equivalent to about 750 million VND, Malaysia is at about 1 billion VND and China is about 1.5 billion VND. "The goal of the tax policy is not to collect small amounts but to nurture sustainable revenue sources. To do so, we must support businesses in the start-up phase - the most difficult phase", he emphasized.
From there, he proposed that the State should consider raising the threshold of tax-exempt revenue to over 750 million to about 1 billion VND to be more suitable for the goal of encouraging startups and nurturing long-term revenue sources.
