From January 1, 2026, the popular tax payment method for business households, known as the “tax quota,” will be officially abolished according to the National Assembly’s resolution on mechanisms and policies to develop the private economy. Instead, business households will have to switch to declaring taxes based on their actual revenue.
Currently, there are over five million business households in the country, providing employment for approximately eight to nine million workers, equivalent to the private enterprise sector. However, according to Ms. Nguyen Thi Cuc, Chairman of the Vietnam Tax Consultancy Association, nearly two million business households are still paying taxes through the quota method, with an average tax amount of only about VND 700,000 per month.
The biggest concern now is that the switch to tax declaration will increase tax obligations. Ms. Cuc stated that many business households, such as pharmacies, clinics, and spas, earn hundreds of millions of dong every day but only pay a few million dong in taxes each month due to the quota mechanism. When they switch to tax declaration, they will have to pay taxes based on their actual monthly or quarterly revenue.
Nearly two million households in the country are using the tax quota method. Illustration. |
Ms. Hoang Thi Nga, owner of a grocery store in Cau Giay District, Hanoi, expressed her concern: “Currently, I pay a tax quota of about VND 600,000 per month, which is simple and does not require any declaration. If I have to declare taxes quarterly and learn how to keep books, handle paperwork, and calculate taxes, I’m afraid it will be too burdensome.”
With the elimination of the tax quota from 2026, business households will have to switch to tax declaration. However, the Chairman of the Vietnam Tax Consultancy Association suggested that tax declaration does not necessarily mean that all households must apply the value-added tax (VAT) calculation method. A simpler approach is to pay taxes based on a percentage of their actual revenue.
For business households with revenue below VND 1 billion, they still need to fulfill their tax obligations, but they can calculate taxes based on a percentage of their revenue for the period, instead of a fixed amount for the whole year. For example, according to current regulations, for commercial activities and goods trading, the tax rate is 1% VAT and 0.5% personal income tax; for automobile repair services, a tax rate of 7% on revenue can be applied; and for house leasing, a tax rate of 10% (including VAT and personal income tax) may be applicable.
Speaking to Tien Phong newspaper, economic expert Nguyen Minh Phong asserted that the key to encouraging business households to transform into enterprises is to alleviate their concerns and assure them that they will not lose out by making this transition.
While the necessary mechanisms and policies are in place, it is crucial to explain to business households that becoming an enterprise will grant them more benefits rather than cause additional hassles, expenses, or disturbances. The business environment must ensure equal access to rights and opportunities for business households, even after they evolve into enterprises. This includes equality in land access, infrastructure, credit, business opportunities, and human resources.
Particularly, Mr. Phong emphasized the importance of transparency and preventing favoritism, which can discourage honest entrepreneurs.
“The Enterprise Law should have a separate section dedicated to regulations for business households transitioning into enterprises. Although they will bear the name ‘enterprise,’ the regulations for this group should be simpler and easier to comply with. An enterprise can operate with just one person and a computer, with access to shared support services for functions like accounting and taxation. The regulations should be simplified for small enterprises compared to larger ones,” Mr. Phong recommended.
Viet Linh
– 05:30 20/05/2025
The Great Departure Delay: Billion-Dollar Project on Hold as Business Chairman is Grounded.
The Ninh Thuan Tax Department has announced that it has requested the Exit and Entry Management Department of the Ministry of Public Security to temporarily suspend the exit of Mr. Nguyen Duc Chi, Chairman of the Board of Directors of Sunbay Ninh Thuan JSC, due to tax debt issues. Sunbay Ninh Thuan JSC is a prominent tourism development company in Ninh Thuan, with an investment of nearly VND 5,000 billion in the region.
Reviewing Taxes and Fees for the ‘Three No’ Fishing Vessels
The Ba Ria – Vung Tau People’s Committee has requested that, by November 15th, the Provincial Tax Department reinforce their manpower to review and guide fishing boat owners through their tax declaration process. This will ensure that all necessary procedures, including the registration of the boats and the payment of the requisite fees, are completed before the issuance of the “three no” fishing boat registration certificates as per regulations.
The Power of Words: Unlocking the Art of Persuasion
“PNJ Unveils its Premier Status in Retail’s Contribution to the National Coffers”
PNJ has solidified its leadership in the retail industry, not only through impressive business figures but also by spearheading the journey towards sustainable development. The company has made a significant impact, contributing 4,500 billion VND to the state budget in the last three years, clearly demonstrating its commitment to the nation’s progress and solidifying its position as a powerhouse in the jewelry industry.
