This change has left many small, individual households bewildered and worried, as they are used to manual practices, lack digital foundations, and fear the risk of mistakes.

Nguyen Thi Cuc, Chairwoman of the Vietnam Tax Consultants Association (VTCA), said the shift from lump-sum tax to self-declaration and invoice issuance is a civilized step in line with modern tax administration practices.

Whether applying lump-sum tax or self-declaration, the tax base for business households and individuals is taxable revenue multiplied by the tax rate on revenue.

However, Cuc pointed out that the current “hidden iceberg” in revenue declaration remains very large. In Hanoi, for example, there are cases where business households declare revenue of only a few billion VND, while actual revenue reaches hundreds of billions of VND.

Presumptive tax carries the risk of under-reporting revenue and lacking documents, while tax evasion of VND100 million or more can lead to criminal prosecution. She cited cases like Mailisa, Ngan 98, Hoang Huong, and Hang Du Muc, where owners established numerous business households to import smuggled goods, trade counterfeits, and evade taxes despite massive revenues.

According to Cuc, in the current transition, tax authorities need to accompany citizens and classify behaviors for appropriate handling; unintentional violations should be guided and corrected. Those who violate unintentionally should be guided rather than facing immediate criminal charges if the violation exceeds VND100 million.

At a recent seminar, an owner of a business household producing fermented pork rolls said that it often buys raw materials such as banana leaves and fig leaves from farmers, which come without input invoices. The question raised was how to comply with tax regulations in such cases.

Cuc said it is necessary to clearly identify the seller. For farming households that directly produce and sell unprocessed agricultural products, the law exempts them from value-added tax and personal income tax. Therefore, these transactions do not have input invoices.

“In this case, business households are allowed to make a purchase list. Previously, there were opinions that the list must be accompanied by the seller’s citizen ID, but that requirement only applies to large transactions. For small households, it is sufficient to have a purchase list and payment transfer documents confirming the transaction as a basis for cost calculation,” Cuc said.

Accordingly, raw material costs will be determined based on the purchase list, serving as the basis for calculating the difference between purchase price and selling price to correctly declare output and input taxes.

Concern about costs, invoice management 

Assessing the impact of switching from lump-sum tax to revenue-based tax declaration for business households, Pham Ngoc Thach from the Vietnam Chamber of Commerce and Industry (VCCI) said that with the tax exemption policy for households with annual revenue below VND500 million, about 90 percent of business households will be exempt from tax.

However, the biggest difficulty for business households when self-declaring is the significantly increased workload related to taxation. A VCCI survey shows that 49 percent of business households worry about higher costs and time spent on managing invoices and documents as revenue grows.

In addition, the use of electronic invoices and point-of-sale devices is also a barrier for many households. As many as 73 percent of surveyed business households said they face difficulties due to a lack of technological knowledge and skills; 53 percent said registration and declaration procedures are complicated; 49 percent find it hard to change old management habits; 37 percent lack time to learn; 37 percent lack investment capital; and 32 percent are concerned about information security.

As a solution provider, Do Tuan Anh, Deputy CEO of KiotViet Technology JSC, said the ability of business households to adapt to technology varies significantly by age group and industry.

“Traditional business households tend to adapt more slowly and need closer, hands-on support. Technology will be the key factor determining the success or failure of this transition,” Tuan Anh said.

As an organization with 10 years of experience supporting digital transformation and providing software solutions for many business households, including tax declaration and invoicing, Tuan Anh noted that business households need only 3–7 days to switch to using software for self-declaring tax based on revenue and income.

Mai Son, Deputy Director General of the General Department of Taxation, said more than 2.5 million business households have been directly surveyed, assessed, and classified by tax authorities based on their readiness for transition and their ability to use technology applications.

Nguyen Le