This change, according to the Ministry, will help individuals develop their business, especially small-scale households and individuals, and encourage individuals to transition into formal enterprises.

According to the MOF’s proposal on the formulation of the Law on Tax Administration Project 2025, there are 3.6 million household businesses under tax management, of which 1,829,920 households have an annual revenue of less than VND500 million.

This means that more than 1.77 million households have revenue exceeding VND500 million per year.

However, of the 1.77 million households, only 37,000 generate more than VND1 billion annually, and just over 4,000 exceed VND10 billion. The remainder are still small business households operating very differently from formal enterprises.

For many households with above VND500 million in revenue a year, complying with the Tax Administration Law from January 1, 2026 is not simply about paying more or less tax, but involves a much more complex shift.

They must shift from the previous presumptive tax model to a new operating approach: maintaining accounting records, using software, issuing invoices, and treating accounting as a regular part of business operations.

Regarding accounting costs, for most household businesses, this is almost mandatory, as the new requirements exceed their ability to self-manage. According to a report obtained by VietNamNet, the common cost ranges from VND2–5 million per month, equivalent to VND24–60 million per year.

The other costs include e-invoicing software, digital signatures, equipment, and system maintenance fees, estimated at about VND3–10 million annually.

However, the most significant burden lies in compliance time. With dozens to hundreds of daily transactions, data entry, reconciliation, and error handling can take from one to several hours each day.

If converted into opportunity cost, this may amount to VND10–20 million per year, or even higher for busy businesses.

Combined, compliance costs are no longer marginal but become a substantial burden, typically ranging from VND40–90 million annually.

For many small household businesses, this could be the largest additional expense once they cross a revenue threshold.

Meanwhile, the previous presumptive tax obligations were relatively low. For trading businesses, the most common group, with annual revenue from VND500 million to under VND1 billion, tax payments were typically around VND7–15 million per year.

In some service sectors, taxes may be higher, but still significantly lower than the compliance costs under the full declaration regime.

Comparing the two figures, compliance costs under e-invoicing versus previous presumptive taxes, it is clear that to “comply properly,” businesses may have to spend several times more than the tax itself.

With compliance costs ranging from VND40–90 million per household, the total cost for the 1,770,080 households above the VND500 million threshold could reach about VND70.803 trillion annually, and up to VND159.307 trillion in a high scenario.

This is a very large compliance cost compared to the budget revenue from this sector, which was VND25,953 billion in 2024 and more than VND31,000 billion in 2025.

As such, compliance costs can be about 2 to 6 times higher than the budget revenue. In other words, to collect 1 dong of tax, the economy may have to spend 2 to 6 dong in compliance costs.

The issue of invoices is equally difficult.

A small shop may generate hundreds of transactions per day, but the majority of inputs come from sources without invoices - wholesale markets, farmers, and small-scale intermediate channels.

Here, the issue is not just a lack of documents. The issue is that the tax calculation method based on invoices does not match the way this sector must operate.

When inputs have no invoices but outputs are forced to have them, the unrecorded portion of actual costs is very easily converted into taxable income.

This means that businesspeople’s taxable income is higher than the actual value, not because they are fraudulent, but because the system cannot accurately measure their costs.

So, another paradox appears: the more one complies, the greater the risk of incorrect tax calculation.

These are the reasons why the recommendation of National Assembly Delegate Nguyen Van Than (HCMC delegation) gained attention when he proposed that the business households with revenue from VND500 million to VND5 billion per year should only apply a simple tax mechanism, instead of being forced to declare every transaction in detail.

Tu Giang - Lan Anh