The Ministry of Finance submitted this proposal to government leaders as part of incorporating and explaining deputies' opinions on the revised Personal Income Tax Law project.

Under the proposal, the Ministry of Finance suggests a new taxable revenue threshold of 500 million dong per year for business households. This amount would also serve as a deductible threshold before tax is paid as a percentage of revenue.

Currently, the tax threshold for business households and individuals is 100 million dong per year, with a planned increase to 200 million dong starting next year. The proposed threshold of 500 million dong would be five times the current level and 2.5 times the planned increase for early next year.

The Ministry of Finance stated that this approach aims to align with reality and ensure relative fairness in personal income tax collection. This includes fairness compared to other income types and between business individuals who are exempt from tax and those who are required to pay.

According to data as of 10/2025, Vietnam has over 2.54 million regular business households. With this proposed tax threshold, approximately 2.3 million business households are expected to be exempt from tax, accounting for about 90% of the total.

In addition to the tax threshold, the Ministry of Finance also proposed that the government apply a profit-based tax calculation (revenue minus expenses) for business households.

Specifically, households with annual revenue under 3 billion dong, if they can determine input costs, would be subject to a 15% tax rate on their profit. This rate corresponds to the corporate income tax incentive for micro-enterprises with equivalent revenue.

If costs cannot be determined, individuals and business households will continue to pay tax as a percentage of revenue, as currently, at a rate of 0.5% to 2% depending on the industry. However, they will be allowed to deduct the revenue amount below the tax-exempt threshold before calculation. This means business households will not be taxed on their entire revenue from the first dong, as is currently the case.

According to the Ministry of Finance, if the new calculation method is applied, all business households and individuals will pay tax based on their actual income.

"If income is low, they will pay less; if there is no income, they will not have to pay tax. Therefore, the tax-exempt revenue threshold will no longer have a significant impact on business households and individuals," the Ministry of Finance stated.

By the end of 2024, the country had approximately 3.6 million business households and individuals. Total state budget revenue last year from this group was about 26 trillion dong. In the first half of this year, this revenue is estimated to exceed 17 trillion dong.

Phuong Dung