Chairman of the National Assembly's Finance and Budget Committee, Lê Quang Mạnh, delivers a speech. — Photo quochoi.vn

Effective January 1, 2026, a new regulation approved by the National Assembly (NA) on Tuesday will exempt individuals and household businesses with annual revenues below VNĐ200 million (approximately US$7,870) from value-added tax (VAT).

Lê Quang Mạnh, Chairman of the NA's Finance and Budget Committee, stated that raising the VAT exemption threshold reflects the growth in GDP and the consumer price index (CPI) since 2013.

"This adjustment aligns tax policy with the current economic situation, reducing the burden on small-scale household businesses," Mạnh said.

Several NA members proposed increasing the threshold further, to VNĐ300–VNĐ400 million per year, to extend support to more small businesses.

However, after careful consideration, the NA Standing Committee opted to maintain the VNĐ200 million threshold to ensure a balanced state budget while introducing a reasonable adjustment amid the current economic context.

According to the Ministry of Finance, the VNĐ200 million threshold will exempt approximately 620,653 household and individual businesses from paying VAT, resulting in an estimated annual reduction of VNĐ2.63 trillion in state budget revenue.

If the threshold were raised to VNĐ300 million per year, an additional 114,082 households would be exempt, reducing state revenue by a further VNĐ6.38 trillion.

To ensure flexibility and adaptability to economic changes, the NA has authorised the Government to adjust the VAT exemption threshold. This provision enables the Government to respond promptly to real economic fluctuations, ensuring tax policies remain supportive and conducive to sustainable economic development.

The amended VAT Law received strong approval, with 63.35 per cent of NA members voting in favour. This revision not only eases the tax burden on small businesses but also facilitates their growth amid ongoing economic uncertainties. — VNS