A new tax management approach needed to promote business household development

Mai Son, Deputy Director General of the General Department of Taxation, spoke at the Conference

A Critical Economic Sector

A Northern regional conference, with the participation of 28 tax departments, focused on strengthening tax management for business households and individual businesses, implementing e-invoices generated from cash registers, and combating tax fraud and evasion in e-commerce in 2024. The conference was organized by the General Department of Taxation on October 8.

According to Mai Son, Deputy Director of the General Department of Taxation, business households and individual businesses are an important economic sector, contributing around 30% of the GDP and employing about 10 million workers nationwide.

This sector not only creates jobs and increases income but also reaches remote and difficult areas where other business sectors cannot operate.

In the digital economy era, business households and individual businesses are expanding rapidly.

They are no longer limit ed to traditional business models (physical stores and fixed business locations) but also include new business forms such as e-commerce, business partnerships with organizations, sharing economy models, and cross-border digital content services.

Deputy Director Mai Son emphasized that given the role and position of this sector in socio-economic development, the Tax Department needed to revise its tax management approach to foster a favorable business environment, promote the development of business households, and ensure tax compliance to prevent revenue loss.

Tighter Regulations for a Fair Business Environment

At the conference, the leadership of the Department of Tax Management for SMEs and business households, individuals, and local tax departments shared challenges in managing fixed-income households.

Many business owners do not accurately declare their revenue, leading to cases where small businesses have much higher actual revenues than declared. Consequently, the Tax Department’s estimated taxable revenue may not reflect reality.

Conference scene.

In some cases, the police have discovered business households with much higher actual revenues than declared, but the Tax Department struggles to handle these cases because taxpayers do not cooperate, and the Tax Department does not have investigative powers like the police.

Another issue discussed is the difference in tax calculation methods between business households, individual businesses, and companies. This disparity leads some companies and administrative units to exploit the invoices issued by business households to legitimize costs, even when no actual transactions occur.

The lack of a requirement to include the buyer’s tax identification number on invoices for certain sectors complicates the management of the value of goods and services purchased from business households, making it difficult to cross-check against declared or estimated revenue.

During the conference, tax departments exchanged practical experiences in tax management for business households in the northern region and explored new tax management solutions to improve efficiency in managing this sector.

Most participants agreed that to ensure tax collection keeps pace with the digitization and electronic transformation of commerce, stricter regulations are needed to create a fair business environment between traditional and digital businesses. This would contribute to increased local budget revenues and ensure the successful completion of State budget revenue tasks.

Representatives of the General Department of Taxation also noted that the Tax Department was actively building an online portal to assist business households and individuals in declaring and paying taxes, as well as developing plans to manage and cross-check information with the tax department’s database, thereby gradually improving the efficiency of tax management for business households.