"Every morning I buy vegetables from farmers, tofu from a family in the village, and sometimes fish brought straight from a nearby stream. They are all small-scale producers selling directly to me. None of them can issue invoices," he said.

The restaurant owner stressed that he fully supports transparent business practices and is willing to fulfill all of his tax obligations. However, in reality, much of his restaurant's raw materials are purchased from farmers and small household producers.

"If the sellers don't have invoices, where am I supposed to get invoices to declare my expenses?" he asked.

Fearing that he might unintentionally violate the law, he has already laid off four of his five employees. His restaurant is now operating on a limited scale.

His question turns out to be the same one facing millions of household businesses across Vietnam. Many are struggling with a simple dilemma: they are required to declare expenses with supporting invoices, yet in many cases those input invoices simply do not exist.

A recent VCCI survey shows about 71 percent of household businesses have difficulty collecting information to issue invoices; nearly 68 percent have trouble accounting for costs; more than 63 percent find tax regulations hard to understand; and about 62 percent are confused when filing.

What makes many household businesses hesitate is not the tax obligation, but the compliance obligation.

For many household businesses, what’s more concerning is what they must spend to be able to pay that tax.

Nguyen Van Phung, senior tax expert, noted that most household businesses in Vietnam “work for one's own wages.” The owner sells and buys goods, handles cash, and manages the shop. Only at the end of the day do they have time for bookkeeping.

“Therefore, when designing tax policy, compliance cost is always a factor that must be considered,” he said.

The broken link in invoicing policy

Many think that just equipping cash registers, accounting software, or electronic invoices can solve the problem. But in reality, many input transactions of business households originate from a sector where it is virtually impossible to generate invoices from the very beginning.

According to the General Statistics Office (GSO), in 2025 Vietnam had about 3.8 million people engaged in self-production and self-consumption work. Around 88 percent of them lived in rural areas, nearly 64 percent were women, and over 61 percent were aged 55 or above.

Additionally, there are over 8 million households nationwide whose primary industry is agriculture, forestry, and fisheries. They grow vegetables, raise chickens, make tofu, engage in small-scale fishing, or sell agricultural products directly to eateries, food stores, and business households.

When the very first links in the supply chain still operate primarily on a household scale, it is unrealistic to expect every transaction to instantly carry full invoices and documentation like the corporate sector.

Therefore, if tax policies are designed solely based on corporate logic without considering the characteristics of the individual business and small-scale agricultural sectors, compliance costs can easily escalate.

Economist Le Duy Binh estimated that Vietnam has about 5.2 million household businesses employing roughly 8 million workers, averaging only about 1.5 workers per household. In other words, most household businesses are essentially individuals or families running small operations rather than companies with professional management and accounting systems.

The Vietnam Association of Small and Medium Enterprises estimates that for the 1.77 million household businesses required to file tax declarations under the previous revenue threshold, annual compliance costs, including cash registers, software, connected devices, accounting services, administrative time and related expenses, could range from VND40 million to VND90 million per household.

This raises a question whether the cost of collecting each additional dong of tax is truly reasonable.

Transparency as well as practicality

Tax reform is not simply about adopting new technology. More importantly, it is about designing a system that millions of household businesses can realistically comply with at a reasonable cost.

If the owner of a small restaurant must cook, shop for ingredients, serve customers and then teach themselves accounting and complete tax procedures equivalent to those required of a corporation, compliance costs could easily become a greater burden than the tax itself.

Tu Giang - Lan Anh