At the discussion session on November 19 on the draft Law on Tax Administration (amended) and the Law on Personal Income Tax (PIT) (amended), Minister of Finance Nguyen Van Thang said the drafting agency will listen to delegates' opinions and focus on establishing a reasonable tax threshold that reflects reality for business households, ensuring fairness for salaried employees.

The Ministry of Finance has proposed a taxable revenue threshold for individuals and household businesses of VND200 million per year or more, effective from January 1, 2026.

Nguyen Thu, the owner of a breakfast sticky-rice shop in Hanoi, expressed concern, saying the taxation threshold of VND200 million per annum is too low. She calculated that with an average price of VND20,000 per box of sticky rice, selling just 28 boxes per day would generate VND560,000 in revenue, and be subject to tax.

“If we have to pay up to 4.5 percent of our revenue as tax (3 percent in VAT and 1.5 percent in PIT), it’s unreasonable. Small vendors like us count on increasing daily sales just to cover costs and reduce financial pressure,” Thu said.

With the VND200 million/year revenue threshold, not only Thu but many other breakfast food business households, including pho sellers who only sell 14 bowls (average VND40,000/bowl) or 22 sandwiches (VND20,000–VND30,000/sandwich) per day, are at risk of having to pay tax.

Van Tuan, the owner of a grocery store in Hoang Liet ward (Hanoi), commented that the VND200 million/year revenue threshold for tax payment is too low for business households. Customers buying two boxes of beer, soft drinks, or a box of milk already have to pay millions of VND. Just VND18–20 million worth of goods each month already exceeds the threshold.

According to Tuan, grocery stores have high revenue but the profit is small, only about 10 percent, while the tax is calculated based on revenue; and a threshold that is too low will create great pressure.

Should the revenue threshold be raised?

Nguyen Ngoc Tu, a lecturer at Hanoi University of Business and Technology, commented that the VND200 million/year threshold is low. He questioned the scientific basis for this figure.

He said VAT is an indirect tax, borne by the final consumer; while business households only collect and remit it. Business households do not use invoices, so when selling a bowl of pho for VND50,000, the VAT portion is already included. VAT is calculated on consumption goods, paid by the consumer, and there is no threshold: where there is revenue, there is tax.

However, in Vietnam, a threshold is regulated due to low income and low revenue; if taxes were calculated, the cost of tax administration would be huge. Therefore, a revenue threshold is used to determine tax exemption or liability.

The VAT Law has already set a VND200-million/year threshold, effective from January 1, 2026. Including the threshold in the Personal Income Tax Law ensures consistency. 

It would be difficult for the PIT Law to adopt a different threshold because the same household business cannot be subject to two different standards. This is the challenge for the Ministry of Finance when drafting policy.

In principle, personal income tax applies family-dependent deductions mainly to salary income, following international practice. For household businesses, whose nature is closer to small enterprises, tax calculation can reasonably be based on revenue.

“With a VND100-million revenue threshold, about 1 million households are exempt from tax; when raised to VND200 million from 2026, the figure may rise to about 2 million (more than 40 percent of all household businesses). If the threshold is raised further, even more households would be exempt. The issue is: what basis do we use to determine that a household truly earns less than VND200 million per year?” Tu said.

Because there is no reliable basis for evaluation, many household businesses with high actual revenue may still be considered as ‘low income’ to avoid taxes. Tu believes that keeping the VND200-million threshold is reasonable, so the Ministry of Finance can assess the policy’s impact, since the revised VAT Law will only take effect in 2026 and cannot be changed immediately.

Commenting on tax management and tax-invoice policies for household businesses, Nguyen Van Duoc, CEO of Trong Tin Accounting & Tax Consulting, proposed setting the non-taxable revenue threshold at VND1 billion.

Nguyen Le