Vietnam to offer substantial incentives for home businesses 

THE HANOI TIMES — The Ministry of Finance will offer significant incentives to encourage household businesses to register as commercial enterprises to help Vietnam reach its target of having two million businesses by 2030.

Minister of Finance Nguyen Van Thang made this statement on May 16 when presenting the draft resolution to promote private sector development at the National Assembly.

Vietnam has over 5.2 million household businesses that generate 8–9 million jobs, comparable to the number of jobs in the private corporate sector, according to data from the General Statistics Office from 2018 to 2020. The Politburo's Resolution 68 sets national goals of having two million enterprises by 2030 and three million by 2045.

Tran Hoang Ngan, Assistant to the Secretary of the Ho Chi Minh City Party Committee, said an average of 30,000 to 40,000 new enterprises are founded nationwide each year, and there should be special solutions and support policies to help household businesses formally register as enterprises to meet national targets.

According to the draft resolution, the current lump sum tax system for household businesses will be abolished on January 1, 2026. Minister Thang stated that this is the right policy to increase transparency in household business operations. One initial support measure is government funding to allow household businesses to use shared accounting software free of charge.

"The government has discussed specific solutions and will design substantial incentives to encourage household businesses to convert into enterprises," Thang affirmed. Currently, the private sector, including household businesses, contributes about 51% of GDP and over 30% of state budget revenue.

The Ministry has piloted the removal of lump-sum taxes in several areas and found the policy to be highly effective. Therefore, it will be enforced nationwide. The Ministry of Finance is preparing the necessary infrastructure, particularly in IT and digital transformation, for tax administration. This includes the use of electronic invoices to help ensure accurate tax collection and facilitate household businesses in declaring and paying taxes.

Currently, households and individual businesses must pay business license fees, value-added tax (VAT), and personal income tax. They may also be subject to environmental protection or resource taxes if they deal in applicable goods. Business license fees range from VND300,000 (US$11.50) to VND1,000,000 (US$39.00) per year, depending on revenue. Businesses with annual revenues exceeding VND100,000,000 (US$3,858) are subject to an additional 1.5% in taxes: 0.5% for personal income tax and 1% for VAT.

Nguyen Thi Viet Nga, Deputy Head of the Hai Duong provincial National Assembly (NA) delegation, called on the government to clarify and expand the level of financial support for purchasing or leasing digital platforms and shared accounting software for household businesses and micro and small enterprises.

Meanwhile, Mai Van Hai, Deputy Head of the Thanh Hoa provincial NA delegation, advocated for additional support policies to train household businesses on using digital platforms and software for tax declarations. He also recommended postponing the abolition of the lump sum system until after July 1, 2026, to give authorities more time to prepare the necessary infrastructure.

The National Assembly will vote on the draft resolution on the morning of May 17.