New regulation: Thousands of stores must pay more taxes

DraftTax Administration Law(Amendment) is being consulted by the Ministry of Finance to propose new regulations to "tighten" tax management for business households.

Notably, the Ministry of Finance plans to classify large-scale business households to apply appropriate tax management forms such as: applying a simple accounting regime corresponding to small and micro enterprises; applying electronic invoices, electronic tax declaration, and electronic tax payment.

This, according to the Ministry of Finance, is to minimize the "exploitation of the household business model" for the purpose of "tax evasion", creating a legal framework on tax to promote large-scale household businesses to convert into enterprises.

Business households with large revenue will have to pay more taxes than enterprises.

In addition, the Ministry of Finance wants to classify business households in the service sector. Accordingly, business households that have cash payment transactions with consumers will have to apply non-cash measures in retail business transactions, restaurants, food service stores, entertainment services, etc.

“On that basis, it is necessary to have management measures for sales requiring invoices or cashless payments to promote the use of electronic invoices, connecting sales revenue information through cash registers or payment card acceptance devices,” the Ministry of Finance stated.

For small-scale businesses, continue to apply the lump-sum tax form, increase transparency, strengthen the role and responsibility of local authorities and relevant organizations in the area, thereby minimizing the tax lump-sum that is not close to reality, minimizing the emergence of secret agreements between businesses and tax officials that cause discontent in society.

With the above classification, only small-scale business households and individuals are allowed to pay lump-sum tax. Large-scale business households and individuals must keep accounting books and pay taxes according to declarations - lump-sum tax is not applied.

Explaining the above policy, the Ministry of Finance said: Up to now, business households are still the subjects with great contributions in creating jobs and income for workers, accounting for a fairly high proportion in the structure of the gross domestic product (over 30% of GDP - statistical yearbook 2017). In recent years, besides small-scale business households that can only cover family living expenses, there are also many large-scale business households.

According to tax management data in 2017, the number of business households with revenue of 1 billion VND or more is 102,095 households, many business households using invoices regularly have revenue of up to several hundred billion VND/year.

Many business households operate in specific fields that are not suitable for the household contract model such as: chemical trading; medical supplies and equipment; construction machinery and equipment; construction materials of mineral resource origin, etc.

Despite rapid and strong development, the Ministry of Finance "complained" that tax revenue from business households accounts for a very small proportion of total state budget revenue (according to 2017 data, it was 1.56% of total state budget revenue excluding crude oil).

"This is an area that is assessed to have revenue losses, so it is necessary to have a solution to expand the tax base, thereby increasing state budget revenue without increasing taxes that affect the businesses under management," the Ministry assessed.

Despite the development status of business households, according to the Ministry of Finance, the legal framework on business households, support policies and management organization of relevant state management agencies still have many shortcomings.

That is, there is no criteria to classify business households to serve tax management; there are no measures to monitor revenue for business households in some specific industries; there is no synchronous database to serve tax management for business households; there is no solution to encourage people to get invoices from business households.