Abolishing presumptive tax ensures greater fairness and transparency: experts

Abolishing presumptive tax ensures greater fairness and transparency: experts

The resolution also emphasises the need to complete the legal framework for individual business operations, accelerate digitalisation and simplify tax, insurance and accounting procedures.

As of the end of March, nearly two million households and individual business owners nationwide were still paying taxes under the lump-sum method. — Photo baotintuc.vn

The abolition of the presumptive tax regime for household businesses is being actively implemented, with a clear roadmap and practical support measures.

The reform is widely seen as aligned with the country’s push towards digital economic development, enhanced tax equity and financial transparency, while encouraging informal businesses to transition into formal enterprises.

Under the Politburo's Resolution 68-NQ/TW, the presumptive tax model is to be completely phased out by 2026. The goal is to narrow the financial and accounting gap between household businesses and micro or small enterprises, and to gradually transition household businesses into entities with proper governance structures.

The resolution also emphasises the need to complete the legal framework for individual business operations, accelerate digitalisation and simplify tax, insurance and accounting procedures.

According to data from the General Department of Taxation under the Ministry of Finance, by the end of March, nearly two million households and individuals were still paying taxes under the presumptive regime, while fewer than 0.3 per cent — just 6,142 households — had switched to the declaration-based method.

In the first quarter of 2025, budget revenue from this group reached approximately VNĐ8.7 trillion (US$335 million), up 25.7 per cent year-on-year. However, the average monthly tax paid by presumptive taxpayers was only VNĐ672,000, compared to VNĐ4.6 million among those under the declaration regime, underscoring fairness and fiscal efficiency disparities.  

The presumptive tax system, which has been in place for decades, applies primarily to small-scale household businesses and relies on estimated turnover and fixed tax rates, regardless of actual profit or loss. This has led to tax evasion risks and potential corruption in tax administration due to the absence of bookkeeping or supporting documentation to verify actual income. 

Nguyễn Ngọc Tú, a lecturer at Hanoi University of Business and Technology, told doanhnghiepkinhtexanh.vn that this outdated model remains one of the biggest barriers to financial transparency in the household business sector.

He described the tax reform as a significant move towards equity, but stressed the need for a gradual, pilot approach by industry and business size. Sectors with clearly traceable transactions — such as food and beverage, transport, pharmaceuticals and supermarkets — should be prioritised for transition, he suggested. 

General Director of Trọng Tín Tax Consulting, Nguyễn Văn Được, argued that switching to declaration-based taxation is not as complex as many fear. It does not require full corporate-level compliance, but only simple accounting practices, supported by valid invoices and receipts. The new regime will ensure progressive taxation, with higher-income earners paying more, in line with the principle of tax fairness. 

As of the end of March, nearly two million households and individual business owners nationwide were still paying taxes under the lump-sum method. — Photo baotintuc.vn

 Strong support from tax authorities and technology providers is needed to facilitate the transition. 

From June 1, under Decree 70/2025/NĐ-CP, businesses in sectors such as restaurants, hotels and retail with annual revenue exceeding VNĐ1 billion will be required to issue e-invoices integrated with point-of-sale systems. Around 37,000 businesses are expected to be covered initially.

At Tax Office Region I, preparation has already begun.

Vũ Mạnh Cường, head of the tax office, said authorities are working closely with technology firms such as Viettel, MobiFone and Misa to deliver tailored solutions for each household business. Today’s e-invoice software can run easily on smartphones, tablets or POS machines, allowing users to file taxes with just a few simple steps, without needing a  professional accountant. “If fully compliant, registration or invoice procedures can take as little as five minutes,” he said.

A dedicated business registration portal for household businesses is also set to launch in May to reduce administrative burdens. Tax officials will be deployed to neighbourhoods to assist residents with the transition, and a virtual tax assistant will operate continuously to help users file conveniently and on time.

To meet the 2026 deadline for full abolition of the presumptive regime, Nguyễn Ngọc Tú proposed a clear transition timeline, targeting 50 per cent of presumptive taxpayers moving to the declaration regime by end-2025, 70–80 per cent by mid-2026 and full completion thereafter. He emphasised the need for strong public awareness campaigns to highlight the new system's benefits. 

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