Vietnam raises tax‑free income threshold to VND 1 billion for small businesses

The Vietnamese government issued Decree 141, lifting the personal‑income‑tax and value‑added‑tax exemption ceiling for individuals and household‑run enterprises to VND 1 billion per year, double the previous limit. The measure is aimed at the roughly 2.56 million small‑scale traders and households that earn below the new threshold, easing their tax burden and supporting continued operation, especially in markets such as Ho Chi Minh City’s Tân Mỹ market. The policy is expected to cut state tax revenue by about VND 4,850 billion but is justified as a way to stimulate the micro‑enterprise sector and secure longer‑term fiscal contributions.

Separately, the Ministry of Finance is drafting a decree to raise the withholding‑tax exemption for incidental income from VND 2 million to VND 5 million per payment. The change would reduce the administrative load and penalties that many taxpayers face when small, irregular earnings are aggregated at year‑end, a problem highlighted by numerous users of the eTax Mobile app. The proposal seeks to simplify compliance and improve public confidence in the tax system.