This proposal was part of VCCI's feedback on the draft decree on administrative penalties for tax and invoice violations.

VCCI suggested a two-year grace period for small businesses, during which they would not face administrative penalties for tax and invoice violations. However, they would still be required to rectify any errors and pay any outstanding taxes resulting from those violations.

This proposal comes as businesses and individuals with annual revenue of 1 billion VND or more are now required to use electronic invoices from cash registers connected to the tax authorities, as per Decree 70/2025.

VCCI acknowledges this as a necessary step but recognizes the challenges involved. A June survey of 1,368 small businesses nationwide revealed a lack of understanding of the regulations. 68% had only a basic understanding or were unsure what to do, and 21% didn't understand the regulations at all. They also face challenges in implementation, including lack of technical knowledge and skills (73%) and difficulty adapting from old management practices (49%).

VCCI believes these challenges, coupled with limited resources, make small businesses prone to unintentional invoice violations, especially formatting errors like incorrect indicators or untimely invoice issuance.

"These are unintentional errors due to unfamiliarity with new procedures and technology, not deliberate non-compliance or tax evasion," VCCI stated. They argue that a compassionate and reasonable penalty policy will encourage compliance and foster long-term revenue for the state budget.

According to the Tax Department (Ministry of Finance), 146,032 businesses registered to use electronic invoices generated from cash registers in the first half of the year, five times higher than the same period last year. By 15/7, this number had risen to 252,635, 2.4 times higher than the end of 2024.

Vietnam has over 940,000 businesses and more than 5 million small business households. The private sector contributes over 30% of total state budget revenue, employs 82% of the workforce, and accounts for about 50% of GDP. Resolution 68, issued by the Politburo in May, affirms the private sector as a key driver of the economy.

Phuong Dung