The National Assembly has approved an amendment to the Value-Added Tax (VAT) law, increasing the taxable revenue threshold from VND100 million to VND200 million annually. Passed on November 26 with overwhelming support, the law is set to take effect in July 2025. This revision aims to modernize tax policies while providing better support for small businesses, balancing state revenue with business growth, according to Le Quang Manh, head of the Finance and Budget Committee.

The Finance Ministry predicts the updated threshold will reduce state revenue by VND2.63 trillion annually. If the threshold were raised further to VND300 million, as some had suggested, the government would face an additional loss of VND3.75 trillion, bringing the total potential loss to VND6.38 trillion. Despite calls for a 0% VAT rate on fertilizers, the new law maintains the existing 5% rate, with lawmakers citing concerns about the financial burden of VAT refunds.

The amendment also focuses on improving tax compliance in e-commerce, addressing concerns over tax evasion from low-value goods sold through foreign platforms. A new resolution has been passed to replace outdated policies, introducing stricter VAT management rules to enhance oversight, particularly on e-commerce transactions.

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