Calculating VAT for individuals and business households: The threshold of 200 million VND/year is too low, selling a bouquet of flowers has already paid tax?

The threshold for taxable revenue needs to be reconsidered; VND200 million/year is too low. It is also not advisable to rigidly stipulate a 20% CPI fluctuation to adjust the revenue for value added tax (VAT).

Business costs, prices of goods, rent, labor, electricity, water, etc. have increased 3-5 times compared to 10 years ago, but the taxable revenue threshold has not increased proportionally - Photo: QUANG DINH

Accordingly, this revenue threshold should be increased based on annual CPI fluctuations.

Many experts and people have suggested the same when talking about the draft. Tax Law VAT The amendment was just submitted by the Government to the National Assembly last week, and is expected to be voted on by the National Assembly on November 26.

According to the draft law, taxable revenue of individual business households will be raised to over 200 million VND, instead of 100 million VND as at present.

"Sell a bouquet of flowers every day and still have to pay tax"!

Talk to Tuoi Tre , Ms. Hoang Quynh Nhu (owner of a fresh flower shop on Ly Thuong Kiet street, Hanoi ) also said that the price is too high. sales revenue It is unreasonable to pay taxes on incomes over 200 million VND/year. Because business costs, prices of goods, business premises, labor, electricity, water, transportation fees... have increased 3-5 times compared to 10 years ago.

And since the COVID-19 outbreak, the economy has been difficult, consumers have tightened spending, so small traders have had to squeeze out enough to cover costs and make a profit.

"With a VAT taxable revenue threshold of over 200 million VND/year, or only about 550,000 VND/day, I am already subject to VAT. So, every day I sell a bouquet of flowers, I have to pay tax," said Ms. Nhu.

Meanwhile, small business owners are not entitled to family deductions for dependents. "The deduction threshold for taxpayers personal income tax (PIT) increased from 4 million to 9 million and from 2020 increased to 11 million VND, but the revenue threshold for calculating VAT for small businesses has remained unchanged for the past 10 years and even if they do business at a loss, they still have to pay tax," Ms. Nhu was upset.

Ms. Ngoc Ha, owner of a small chicken pho restaurant in Binh Thanh District (HCMC), also said that she sells at home, earning money by working. Although she does not have to pay for the premises, in recent years, the cost of gas, electricity, raw materials... has increased. Meanwhile, her family has to hire two more people to help with serving, washing dishes, cleaning...

However, the tax industry's regulation that only 550,000 VND/day revenue must pay tax is unreasonable. "With the current price of each bowl of pho at 40,000 - 50,000 VND, if you sell 11 - 13 bowls of pho, you must pay tax, which is very unreasonable," said Ms. Ngoc Ha.

Therefore, according to Ms. Ha, it is necessary to further raise the taxable revenue threshold because most businesses like hers operate on a family scale, with at least 3-4 people working together and they are not eligible for any family deductions.

Meanwhile, Mr. Minh Phu (Thu Duc City) said that after 10 years and many proposals, the taxable revenue level was raised, but the increase was not enough to compensate for recent price fluctuations.

"This year is a sad economic year, shops are deserted, we are trying to hold on to get through the difficult period so we really need encouragement through "tax policy," said Mr. Phu.

Experts say the CPI fluctuation rate used as a basis for considering adjusting the taxable revenue threshold to 20% is too high - Photo: NGOC PHUONG

Should remove the regulation of CPI fluctuation of 20%

Speaking with Tuoi Tre, Dr. Nguyen Ngoc Tu, a senior tax expert, suggested that the Government should provide a convincing basis when choosing the threshold for VAT revenue for households and individuals trading in goods and services at 200 million VND per year. Why 200 million VND?

Mr. Tu also said that if the regulation is applied when the CPI fluctuates by 20%, the Government submits to the National Assembly Standing Committee to adjust this threshold as in the draft, it will "follow the footsteps" of the family deduction level in the Personal Income Tax Law. The rigid regulation of the CPI fluctuation by 20% means that taxpayers have to wait 6-7 years for the revenue threshold to be adjusted.

"It is not advisable to stipulate such a specific and excessively high level in the law, because it will be disadvantageous to taxpayers. The inadequacies in the provisions of the Personal Income Tax Law on family deduction levels are clear" - Mr. Tu recommended and suggested that we should base on the annual fluctuations in CPI to increase this revenue threshold to ensure fairness and equality with taxpayers.

In addition, according to experts, the taxable revenue threshold for households and individual businesses should not only be based on CPI fluctuations but also on GDP. basic salary, minimum wage... also ensure tax policy is not outdated, backward compared to the reality of socio-economic development.

Because in the report explaining and accepting the draft law, the National Assembly Standing Committee just sent to the National Assembly delegates for this session clearly stated that the revenue of 100 million VND/year, if calculated according to the GDP growth rate and average CPI from 2013 to present, would be 285 million VND.

"Therefore, the regulation of revenue levels must ensure that they are not outdated or out of date even when amended law On the other hand, tax policy is not only to collect taxes but also to encourage and motivate business households to expand their business, increase revenue and establish enterprises, ensuring transparent operations," said an expert.

Tax expert Nguyen Thai Son also said that experience from personal income tax shows that the adjustment level should not be tied to CPI fluctuations because it is not suitable for reality and each adjustment is very difficult. In mandatory cases, the fluctuation level should only be regulated at 10% and should not be "sky-high" like that.

"In the current economic difficulties, we need incentive policies so that businesses can do business, thereby promoting the circulation of goods and creating jobs for people," said Mr. Son.

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