Raising the tax threshold for household businesses: Timely removal of difficulties, strengthening management from the root

Easing the burden on household businesses to preserve resources for the economy

At the group discussion session within the framework of the First Session of the 16th National Assembly on the draft law amending and supplementing several provisions of tax laws, Prime Minister Le Minh Hung proposed that National Assembly deputies support the policy of raising the tax threshold applicable to household and individual business entities. Under the proposed option, the revenue threshold is expected to be increased to VND 1 billion per year; below this level, household businesses will not be subject to value-added tax and personal income tax.

This is a noteworthy policy signal, as it reflects not only a technical adjustment in taxation but also a clear expression of governance that is closely aligned with practical realities and responsive to emerging pressures in the economy. In the context of fluctuating fuel prices, a complex regional environment, rising input costs, and the erosion of resilience in the small business sector, raising the tax threshold is a necessary step to ease pressure, maintain production momentum, stabilize livelihoods, and create room for reinvestment for millions of household businesses.

In his remarks at the group discussion, the Prime Minister emphasized that the Government “fully agrees that it is necessary to study and adjust the wording in the draft in the direction that the tax threshold must certainly be raised.”

This is a statement with a clear policy orientation: tax policy cannot stand outside of reality, nor can it move more slowly than the pace of economic life. When difficulties are already present, policy responses must be sufficiently fast, sufficiently targeted, and sufficiently strong to support the most vulnerable sectors.

The core issue lies in the fact that household businesses and individual business entities currently remain a large force, contributing to the circulation of goods and services, generating employment, and sustaining market vitality at the grassroots level. Supporting this sector, therefore, is not merely about alleviating burdens for a group of taxpayers, but about maintaining the operational foundation of the grassroots economy.

Support must go hand in hand with tax fairness, transparent administration, and the prevention of revenue loss.

However, the noteworthy point in the Prime Minister’s statement is not only the “raising of the threshold,” but raising it on the basis of strict management and policy fairness. The Prime Minister clearly noted that efforts to remove difficulties for household businesses and individual business entities must simultaneously be linked with support for small and medium-sized enterprises in order to ensure fairness in the application of tax policy; only then can household businesses be encouraged to transition into enterprises.

This is a correct and well-targeted policy mindset. If it merely stops at providing incentives, the policy may create an unreasonable disparity between household businesses and enterprises, and may even give rise to a tendency to “stay anchored” in the household business model in order to benefit from lower tax obligations. In that case, the support objective would become misaligned, while the business environment would lack incentives to shift toward a more formal, transparent, and professional model. Therefore, tax administration in this period cannot be viewed solely from the perspective of reducing immediate burdens, but must be placed within the overall objective of developing a healthy, sustainable, and law-abiding private sector.

The Prime Minister also clearly stated the requirement to develop very strict criteria, principles, and provisions in the implementing guidance documents in order to avoid loopholes that could lead to tax revenue loss. Along with this is the modernization of the tax administration system, strengthening the application of science and technology in tax collection, and urgently finalizing the implementing decree to ensure that once the National Assembly approves the policy, it can be implemented immediately.

The policy message is one of easing the burden on the people without loosening discipline; supporting development rather than prolonging fragmentation; and resolving immediate difficulties while still upholding the principles of fairness, transparency, and effective public governance. This is also a prerequisite for a tax policy that both provides substantive support for household businesses and avoids eroding fiscal discipline, creating policy inequality, or paving the way for revenue loss.

The proposal to raise the tax threshold for household businesses is not merely a short-term solution. It is a policy adjustment of an orientational nature, demonstrating that the governance mindset is shifting strongly toward accompanying citizens and enterprises, while at the same time tightening state management requirements through law, technology, and enforcement accountability.