From the perspective of small business owners—those who constantly juggle capital, battle rising costs, and try to keep their word with customers—the current revenue threshold of 200 million VND per year for tax liability is being viewed by many National Assembly deputies as unrealistic. Put simply, if a household business only earns 200 million VND a year, then after covering all operating expenses, the actual amount left is barely anything.
On the morning of November 4, 2025, the Government submitted the amended Personal Income Tax (PIT) Law to the National Assembly, proposing comprehensive adjustments to 35 existing articles. Among the changes, the draft law maintains the 200-million-VND annual revenue threshold as the “non-taxable level” for household businesses, starting from January 1, 2026, when the current quota-based system will be replaced by self-declaration and self-payment.
Household businesses with annual revenue between 200 million and under 3 billion VND will be taxed directly on their revenue, with specific rates for each sector: distribution–wholesale–retail at 0.5%; services and construction without material supply at 2%; manufacturing–transportation–construction with material supply at 1.5%; property leasing and certain specific agency activities at 5%; digital content, online entertainment, electronic media, and digital advertising at 5%; and 1% for other sectors. Those with revenue from 3 billion VND and above will be subject to a 17% tax on profit.
Deputy Trần Văn Lâm (Bắc Ninh) argued that although reform is necessary, small household businesses—already at the “bottom rung” of the economic ladder—will bear the heaviest burden. Most of them merely earn enough to support their families, cover daily expenses, and have almost no savings.
He further explained that the actual profit margin of small businesses is only around 3–5%, or 10% at best. If taxes of 1–5% are imposed on gross revenue, nearly the entire profit would “evaporate.” Compared to enterprises with full accounting systems, taxing revenue directly places household businesses at a clear disadvantage.
Mr. Lâm also pointed out the discrepancy compared with salaried workers: an employee earning 10–11 million VND per month must pay income tax, while a household business with 200 million VND annual revenue—about 16.6 million per month—but real profit of only around 1.6 million, is still classified as taxable. Is that fair? They also have children to raise, parents to care for, and family responsibilities, yet they receive no equivalent family deductions.
Associate Professor Trần Hoàng Ngân agreed: 200 million VND sounds like a lot, but after paying electricity, water, rent, labor, and inventory costs, almost nothing remains. Compared with the new family deduction of 15.5 million VND per month (around 280 million per year), keeping the 200-million-VND threshold for household businesses is unreasonable. He suggested raising it to 300–400 million VND per year.
Professor Hoàng Văn Cường added that taxes should be levied on profit, not revenue. For example, someone selling 200 boxes of milk may have 200 million VND in revenue but only 10 million in profit—yet still has to pay tax. That is clearly illogical. He proposed that tax thresholds should be based on actual income.
From the viewpoint of small business owners, tax policies must reflect reality—fair, reasonable, and not “strangling” those who are simply trying to earn an honest living. Their concerns are entirely legitimate and deserve careful consideration by lawmakers.
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