With current regulations, small traders only need to pay VAT with a revenue of about 280,000 VND/day.
If the revenue is increased to 200 million VND/year as proposed, the revenue threshold pay tax around 550,000 VND/day, still not suitable for today's reality.
Many experts have confirmed this when discussing with us the proposal to raise the VAT taxable revenue threshold for households and individuals doing business to 200 million VND/year instead of 100 million, according to the draft Tax Law. value added The revised VAT is being submitted for comments by the Ministry of Finance.
According to the program, the draft will be approved by the National Assembly at the opening session at the end of October. Many people expect VAT revenue to be increased soon, not just 200 million/year as proposed but higher than that.
Selling 7-8 bowls of pho/day is taxable
Mr. Nguyen Van Hoang (Hoang Mai district, Hanoi), who is driving a technology car in Hanoi, lamented that worker The poor have not yet dried their sweat and have no food to eat but still have to pay taxes.
According to Mr. Hoang, the price of gasoline in 2015 was only 18,000 VND/liter of gasoline and less than 14,000 VND/liter of diesel.
However, in recent years, gasoline prices have increased sharply, even reaching nearly 30,000 VND/liter at one point before falling to the current price of 22,000 VND/liter.
With this price of gasoline, the revenue from driving increases with the price of gasoline but the income of drivers does not increase but on the contrary decreases. It is worth mentioning that technology drivers are still subject to VAT because the revenue far exceeds the figure of 280,000 VND/day.
"The long-standing inappropriate policy has made workers very miserable. If they don't work, they won't have money to pay for their children's education, family expenses... But working hard without enjoying the results is just to pay taxes" - Mr. Nguyen Van Hoang lamented.
Ms. Tran Thi Luyen, owner of a pho restaurant on Hai Ba Trung Street (Hanoi), said that all costs from electricity, water, input materials to rent... have increased every year. 10 years ago, a bowl of pho cost 25,000 - 30,000 VND but now it costs 35,000 - 50,000 VND.
Therefore, with an annual revenue threshold of over 100 million VND, VAT must be paid. Selling 7-8 bowls of pho per day for about 280,000 VND is taxable.
"Since the COVID-19 pandemic, small business owners have been struggling to survive, literally working for profit. Meanwhile, salaried employees have had their family deductions increased twice from 4 to 9 and then to 11 million VND, while business owners' revenue over the past 10 years has remained the same," said Ms. Luyen.
Ms. Thu Hang, owner of a small restaurant in Ho Chi Minh City, said that not only has it been going on for many years, the problem is that business individuals are not entitled to family deductions like salaried employees. Meanwhile, according to regulations, if you have an income of 100 million VND/year or less, you do not have to pay taxes.
But if the income is more than 100 million, for example 100 million and 500,000 VND/year, tax must be paid on the entire revenue. This is unreasonable, because each month, the revenue only needs to be more than 8.3 million VND to pay tax. If calculated on an average daily basis, it is equivalent to 280,000 VND/day.
"This is a very small number, it must be said that it is unrealistic in the current context. Even a small sticky rice stall selling in the morning has a revenue higher than the tax threshold. Therefore, if this revenue level is applied correctly, any individual business must pay tax. On the contrary, if it is below the tax threshold, they will not be able to make ends meet," said Ms. Thu Hang.
Mr. Tan Anh, the owner of a night noodle cart in a central district of Ho Chi Minh City, said the cost of raw materials, not including labor, is around 2 million VND/day, so he must have a revenue of at least 3 million VND/day to cover the cost of premises, hiring assistants, electricity, water, etc.
"The revenue of 100 million VND is only equivalent to my revenue within 1 month. I recommend that the taxable revenue threshold should be adjusted to match the current price level and have a suitable adjustment mechanism to avoid the situation where prices increase but taxes remain the same as in the past," Mr. Tan Anh suggested.
Don't "tackle" with taxpayers!
At a legal session organized by the National Assembly Standing Committee last week (August 14), when giving comments on the draft VAT Law, Mr. Le Quang Manh, Chairman of the National Assembly's Finance and Budget Committee, said that it is necessary to specify the annual revenue level in the law, from 200 or 300 million VND or less, which is not subject to VAT.
At the same time, the law assigns the National Assembly Standing Committee to adjust this revenue level in accordance with the socio-economic development situation of each period. According to the current law, the threshold is 100 million VND/year. If calculated according to the average GDP growth rate and CPI from 2013 to present, this level will be equivalent to 285 million VND/year.
Speaking to Tuoi Tre, Dr. Nguyen Ngoc Tu, a senior tax expert, suggested raising the VAT revenue threshold to match the increase in GDP and the price index so that households and individuals do not suffer any more. The VND100 million/year threshold, which has been in place for the past 10 years, is already outdated when the price index and GDP are increasing.
"Whether the revenue threshold is 200 million VND or 300 million VND or any specific level, the Ministry of Finance needs to assess the GDP growth and fluctuations of consumer price index
In addition, it is necessary to consider changing this threshold to suit the actual situation, which can slide according to the fluctuations of the annual price index, to avoid the situation as prescribed in the Law. Personal income tax "When the price index fluctuates by 20%, the family deduction level should be increased" - Mr. Tu recommended.
Regarding the taxable revenue threshold, Mr. Tu added that the applied level must be consistent with the tax system. For example, the personal income tax policy stipulates the family deduction level for taxpayer is 11 million VND/month. Thus, an employee's annual income of 132 million VND/person is not subject to tax, not to mention family deductions for dependents.
In the coming time, the family deduction level will be increased according to the fluctuation of the price index. This is business revenue so the level must be higher than the personal income family deduction level.
Commenting on this content, Ms. Nguyen Thi Cuc, President of the Tax Consulting Association, said that the whole country has about 5 million households and individuals doing business. The revenue from this sector is quite modest. On the other hand, like personal income tax, the regulatory viewpoint is not to collect tax from the first dong.
"Therefore, determining the taxable revenue level needs to be carefully researched and considered to be more suitable to the actual situation and have the stability of the law," said Ms. Cuc, adding that the viewpoint of setting the taxable revenue threshold should not be too "strict" with taxpayers, especially business households and individuals.
"Among the total of about 5 million households and individuals doing business nationwide, the proportion of households and individuals doing business that are small traders and doing business just to make ends meet is quite large. Therefore, tax policy should encourage people to expand. "We should encourage them to do business and work hard, but don't let them think that paying taxes is a burden," Ms. Cuc suggested.
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