Prime Minister: Expected to raise the tax threshold for business households to 1 billion VND

The above information was shared by Prime Minister Le Minh Hung at the afternoon group discussion on April 21 about the draft Law amending and supplementing a number of articles of the Tax Laws: personal income (PIT), added value (VAT), corporate income and special consumption.

According to the Prime Minister, the Law on Personal Income Tax and VAT (amended) was recently approved by the National Assembly at the December 2025 session, but the practical situation that has arisen in recent times has made the taxable revenue threshold of 500 million VND currently inappropriate. “The impact of gasoline prices and regional developments directly affects those who must be given priority attention: individuals, business households, and small and medium-sized enterprises,” he said.

Therefore, the Government has directed the Ministry of Finance to study the plan, as well as ask the Chairman of the National Assembly for permission to propose adjustments right at the first session, the ongoing XVI session.

The Prime Minister affirmed “definitely raise the tax threshold of business households”. He further informed that according to a report from the Ministry of Finance, the tax-free revenue of business households is “expected to be from 1 billion VND per year” – or double the current level.

“I believe that applying timely policies will be effective for business households, small and medium enterprises, as well as encourage business households to convert to enterprises,” the head of the Government said.

In the previous discussion, most delegates agreed with the policy of amending taxes to meet current urgent needs, removing difficulties for business households and small and medium-sized enterprises.

Mr. Bui Xuan Hai, Rector of Hai Phong University, proposed that the draft law stipulate a specific revenue threshold so that business households and individuals know whether they will be exempt from paying taxes or not.

According to the draft submitted to the National Assembly this afternoon, the drafting agency proposed a threshold for revenue not subject to personal income tax “according to the level prescribed by the Government”. Mr. Hai suggested that in case the Government has not calculated a specific number, it should not be corrected in this direction. Instead, according to him, the drafting agency only needs to add a sentence right after the current figure of 500 million VND, “or another higher number, decided by the Government”.

He believes that this approach will demonstrate the Government’s flexibility in operating, as well as transparency with people and businesses.

Deputy Head of the Hai Phong City Delegation Nguyen Thi Viet Nga proposed that the Government stipulate the bases for determining the tax revenue threshold of business households, such as minimum living standards, fluctuations in the consumer price index (CPI), industry characteristics or tax compliance costs.

She also noted the need to control the risk of dividing revenue to avoid taxes. Because when the revenue threshold becomes the basis for tax exemption, it can easily lead to a situation where an establishment splits many households, using the names of individuals in the family to divide points of sale, accounts, invoices, and even divide transactions on digital platforms to keep revenue below the taxable threshold.

Therefore, Ms. Nga proposed the need to identify cases of “same location, same model, same supply chain or same actual manager” to accumulate revenue according to the principle of preventing artificial separation.

Mr. Nguyen Ngoc Son, Member of the Committee for Science, Technology and Environment also made a similar recommendation. “If the policy design is not strict, on the one hand it will support growth, but on the other hand it can encourage informalization of the economy,” the delegate stated. He explained to businesses that declarations, deductions and invoices will be stricter.

According to Mr. Son, if the household business remains below the threshold, the business household will not be subject to taxes and will also reduce compliance pressure. This unintentionally creates a “tax avoidance zone” that makes business people not want to switch to a business model.

Regarding this issue, the Prime Minister said that when an appropriate tax threshold is determined, the Government will report to the National Assembly on criteria, bases and principles to ensure strictness and avoid loopholes in tax revenue loss. At the same time, according to him, the competent agencies of the Ministry of Finance are also finalizing a Decree to guide the implementation of the new law, ensuring it will be submitted to the Government for promulgation immediately to synchronize its effect with the law when passed by the National Assembly.

According to the Ministry of Finance, in the period 2022-2025, the country will have 3-4 million business households, of which more than 2 million households declare taxes stably, contributing about 2% of total budget revenue. Last year alone, tax revenue from this area reached 32,840 billion VND, an increase of 37.5% over the same period.