In late June, the Ministry of Public Security began drafting a law to amend and supplement several articles of the Law on Handling Administrative Violations. The draft proposes increasing the maximum administrative fine for individuals to 1,5 billion VND, and double that amount for organizations, which is 1,5 times the current level.

Commenting on the draft, various agencies and ministries stated that raising the fine ceiling is a necessary adjustment. This aligns with current socio-economic development and enhances deterrence, especially in sectors with high economic profits.

However, higher fines could create significant financial pressure, particularly for small and medium enterprises. Additionally, without strict inspection and supervision mechanisms, there is an increased risk of abuse of power during the sanctioning process, according to the Phu Tho Provincial National Assembly Delegation. The Hanoi City and Ninh Binh National Assembly Delegations requested a comprehensive impact assessment on citizens and businesses, along with more persuasive empirical data to justify this increase.

Violations in cities may incur higher fines

The Ministry of Public Security's draft proposes that city People's Councils have the authority to apply higher fines in cities, not exceeding two times the general fine level. The Da Nang City National Assembly Delegation largely agreed with this decentralization policy, allowing localities to proactively manage their specific socio-economic conditions. However, to ensure accountability and prevent regional inequality, Da Nang proposed adding specific criteria within the Law itself to define "special management requirements." This delegation believes that decisions on higher fines must be based on scientific grounds, such as population characteristics, density, infrastructure development levels, and the prevalence of violations. This ensures the principle of decentralization is coupled with power control, limiting inconsistent application among localities.

The Hanoi City National Assembly Delegation also expressed concern about the uniformity of the legal system and the investment environment if penalties differ across localities. This could lead to disparities in legal compliance costs, creating difficulties for businesses operating in multiple areas.

Authorities rectify sidewalk encroachment in Hanoi. *Photo: Giang Huy*

Household businesses should not face individual-level fines

The Quang Ngai Provincial National Assembly Delegation also highlighted an issue regarding fairness in legal responsibility for household businesses. Specifically, the draft proposes that household businesses, households, and residential communities committing administrative violations be subject to individual-level fines. The delegation observed that many household businesses have large production scales, high revenues, and employ many workers, comparable to enterprises. Yet, under the draft, they would still face fines at the individual level. Therefore, applying a blanket individual fine to all household businesses is unfair and disproportionate to the legal responsibilities of large business entities. Consequently, this delegation requested the drafting agency to research regulations that classify household businesses by scale, revenue, or other appropriate criteria to determine corresponding fine levels, ensuring fairness and consistency in the business environment.

In response to these comments, the Ministry of Public Security, as the lead drafting agency, explained that the Government had already approved the policies on increasing fines in the draft law's dossier. The practical basis cited is the significant fluctuation in economic scale, average income, and currency devaluation over the past decade. A summary report indicates that administrative fines and maximum monetary penalties in various sectors have remained unchanged since 2012. Meanwhile, the basic salary in 2012, which was 1,050,000 VND/month, will have increased by 2,2 times by 2025, reaching 2,340,000 VND/month. Vietnam's average per capita income, approximately 2 million VND/month in 2012, reached 7,7 million VND by 2024 (a 3,85-fold increase).

The Ministry of Public Security assesses that in many sectors such as environment, food safety, minerals, and cybersecurity, profits from violations often far exceed the current maximum fines, rendering administrative sanctions ineffective as a deterrent. Specifically for cities, the application of higher fines in areas like traffic, land, environment, and food safety is inherited from current regulations, with additional high-management-demand sectors like fire prevention and fighting included to ensure urban safety.

The Ministry expects to submit the draft to the National Assembly for consideration and approval at the 2nd Session of the 16th Legislature (October 2026).

Hai Thu