The Ministry of Finance has revealed that approximately 80% of individual businesses in Vietnam generate annual revenues of less than 1 billion VND, exempting them from tax obligations. This information was disclosed in response to inquiries from voters in Ho Chi Minh City regarding the current tax policies affecting small businesses.
Currently, only about 20% of individual businesses exceed the 1 billion VND revenue threshold. The Ministry acknowledged that existing tax policies have not been conducive for small-scale operations, complicating their ability to utilize technology for tax declaration and compliance. This has led to concerns about potential penalties for errors in tax reporting.
In alignment with the Communist Party's directives, the Ministry of Finance is set to implement self-declaration and self-payment of taxes for individual businesses starting January 1, 2026. This initiative aims to streamline tax processes and enhance compliance among small businesses.
To facilitate this transition, the Ministry has introduced a series of reforms aimed at simplifying tax procedures and promoting digital transformation in tax management. The revenue threshold for exemption from value-added tax and personal income tax has been progressively increased from 100 million VND to 200 million VND, then to 500 million VND, and now stands at 1 billion VND annually.
Data from the first half of 2026 indicates that around 80% of individual businesses with revenues below 1 billion VND are not liable for value-added tax or personal income tax. Only 20% of businesses surpass this revenue mark and are required to comply with tax regulations.
This approach reflects the government's focus on managing larger businesses while reducing the tax burden and compliance costs for smaller enterprises. Furthermore, the Ministry is committed to simplifying tax administration processes for smaller businesses by ensuring that all tax-related procedures can be completed electronically.
For those businesses earning below 1 billion VND, they will only need to report their annual revenue once. Meanwhile, the 20% of businesses with higher revenues will receive support from tax authorities and financial institutions to adopt electronic invoicing, accounting software, and electronic payment solutions to ease the burden of compliance.
The Ministry of Finance has also emphasized the importance of enhancing taxpayer education and support, ensuring that businesses receive tailored assistance based on their size, age, and industry. The goal is to improve the overall taxpayer experience and ensure timely compliance with tax obligations.
As a result of these initiatives, the Ministry reported that the electronic tax filing rate among individual businesses reached 99.6%, with 98.1% of tax declarations submitted on time in the first half of 2026. Moving forward, the Ministry plans to continue refining policies and improving management methods to enhance service quality for taxpayers, ensuring that tax compliance is increasingly convenient and transparent.
