Proposal for tax threshold for business households from 3 billion VND
On the morning of April 23, continuing the First Session, the National Assembly discussed in the hall the draft Law amending and supplementing a number of articles of the Law on Personal Income Tax, Value Added Tax (VAT), Enterprise Income Tax and Special Consumption Tax.
Delegate Nguyen Duy Thanh (Ca Mau Delegation) said that the draft law assigns the Government to stipulate the tax exemption revenue threshold for individuals and business households in the VAT Law and the Personal Income Tax Law. This regulation will increase proactive management in accordance with reality when the scale of business households is very diverse.
The delegate cited that, although they are both food service business households, revenue may differ greatly between small eateries in residential areas and chain stores in large urban areas. If the regulations are rigid in the law, it will be difficult to promptly reflect price fluctuations, inflation or changes in consumer behavior.
The delegate proposed that the taxable revenue threshold for business households is 3 billion VND, divided equally for 12 months, equivalent to a monthly revenue of about 250 million VND.
With this revenue level, deducting expenses (site rental, interest rate, labor hire), business households still make a profit of about 10%, equivalent to 20 million VND. If the couple raises 2 more children, a profit of 20 million VND is a very low level.
Delegate Nguyen Duy Thanh also noted that assigning the Government to stipulate revenue thresholds that are not subject to tax but lack a framework of orientation may lead to instability in policies for taxpayers, especially small businesses that are very sensitive to tax obligations.
Therefore, he proposed considering two directions: stipulating a rigid framework in the law (for example, minimum revenue and maximum revenue are exempted or reduced from taxes) to ensure stability; or establishing clear principles (such as linking to per capita income, living standards of the population, consumer price targets) so that the Government has a basis for transparent and predictable adjustments.
Do not divide business households, divide cash flow to be below the tax threshold
Delegate Nguyen Thi Viet Nga - Deputy Head of the National Assembly Delegation in charge of Hai Phong City said that the new draft has supplemented the principle that the Government stipulates the annual revenue level based on the socio-economic context in each period. This is a necessary content to be absorbed.
However, according to the delegate, the issue is not only who to regulate, but also how to control after regulation.
If the revenue threshold is the basis for not having to pay personal income tax or not being subject to VAT, then it is very easy to develop a situation of dividing business households, dividing cash flow, dividing sales points or being in the name of many people to be below the threshold.
The Ministry of Justice, when appraising, also set out the requirement to supplement criteria and principles to ensure rationality, feasibility and uniform application.
Therefore, the delegate proposed that in the detailed regulation document, the Government should design principles against artificial division of revenue; and at the same time have a periodic reporting mechanism to ensure that the adjustment of the revenue threshold is truly in line with the support objective, not becoming a loophole causing budget revenue loss.
