On October 13, the Standing Committee of the National Assembly discussed the draft amendment to the Law on Tax Administration.

Under the draft law, the amendments follow the policy to abolish lump-sum tax mentioned in Resolution 68. Accordingly, business households and individuals’ actual annual revenue will determine if they are exempt from paying tax.

Taxable business households and individuals would declare and calculate taxes for each type per tax period. The Government said this includes value-added tax calculation methods, revenue declaration dossiers, procedures, and tax payment. 

The Ministry of Finance regulates accounting regimes for business households and individuals.

The law would take effect from July 1, 2026, except for Article 13 on declaration by business households and individuals, which would be effective from January 1, 2026, as proposed by the Government.

The preliminary review summary report on the draft Law on Tax Management (amended) by the National Assembly's Economics and Finance Committee states that once business households and individuals shift from lump-sum to declaration, revenue declared via invoices is expected to be higher than the current presumptive figures.

Accordingly, tax burdens (value-added tax and personal income tax) for business households will change substantially.

"Therefore, the standing reviewing agency proposes that the drafting agency calculate and thoroughly assess impacts of changing tax obligations on business households and individuals. If necessary (if declaration revenue changes versus current lump-sums are too large), consider adjusting tax rates (in policy laws) to reduce burdens on related subjects,” the report said.

On electronic invoices, the draft stipulates allocating 0.1 percent of the previous year's domestic value-added tax total to implement measures (regulated by the Ministry of Finance) to encourage consumers to take invoices when purchasing and reward those reporting businesses not issuing invoices.

The Standing Economic and Finance Committee believes encouraging and rewarding consumers is necessary, but policy effectiveness remains unclear.

In the context of increasing budget pressures, the standing Economic and Finance Committee proposes continuing this policy from propaganda and taxpayer support funds as done previously. It also proposes that the Ministry of Finance (MOF) arrange suitable funding, ensuring transparent and effective implementation.

Prior to that, the Ministry of Finance issued Decision No3389 approving the project “Shifting tax management model and methods for business households when abolishing lump-sum tax,” expected to apply from January 1, 2026.

Once effective, all business households will switch to self-declaration and self-payment methods. Related legal documents on business household tax management will be supplemented, amended, or newly issued to ensure harmonious implementation.

The project sets specific goals, including: reducing at least 30 percent of administrative procedure processing time and 30 percent compliance costs; 100 percent of business households receive dissemination, guidance, and support during transition; 100 percent of business households subject to electronic invoices from cash registers (POS); and 100 percent of business households perform tax procedures electronically conveniently and easily.

Also, Tax Management Law will be amended and guiding documents to abolish lump-sum tax forms will be promulgated, while decrees and circulars will be reviewed for unity and synchronization in implementation.

Personal income tax and value-added tax policies for household businesses will be adjusted so that the tax-exemption revenue thresholds match practical conditions. For those with full accounting books, personal income tax will apply on net income (revenue minus expenses), encouraging transparency in costs and expanded investment.

Regulations for larger household units comparable to small and medium enterprises will be revised to ensure parity with corporate income tax. Provisions for personal income tax exemptions or reductions will be added to encourage innovation, in line with Resolution 68.

Additionally, the Ministry of Finance will review the Law on Fees and Charges, the Law on Support for Small and Medium Enterprises, and consider drafting a Law on Individual Business to concretely support household business development.

The project also tasks researching a new tax management model for business households post-lump-sum abolition, grouped by revenue scale.

Accordingly, the grouping by revenue scale would determine suitable tax calculation/management methods, set revenue thresholds for electronic invoice application connected to cash registers, and clearly define roles and functions of tax agency departments in managing business households (registration, declaration, tax accounting, refunds, exemptions/reductions, inspections, debt enforcement, etc), avoiding gaps or overlaps in task shifts when changing management methods.

The taxation agency has also proposed tax administration models for household businesses based on revenue thresholds and tax rates by tax type.

Nguyen Le