Not only worried about tax increases, after a week of applying the regulation of issuing electronic invoices when selling directly to customers and connecting cash registers to tax authorities, many businesses are worried that they will be charged additional taxes after declaring.
Many households have annual revenue of tens of billions of dong.
Ms. Tran Nguyen, a wholesaler and retailer of seafood and meat in Tan Binh District, Ho Chi Minh City, said that after applying the regulation requiring business households to switch from lump-sum tax to declared tax, the couple was worried that the amount of tax to be paid would increase while business was becoming increasingly difficult.
“Previously, the tax advisory board calculated my household’s revenue to be 90 million VND/month, multiplied by the tax rate of 1.5%, so the lump-sum tax payable was 1,35 million VND/month. Since the beginning of June, the supplier has increased the price of crab meat and squid by 6 VND, to 5,000 VND/kg and 275,000 VND/kg, respectively. The increase in product prices plus the issuance of full invoices means that the revenue for tax calculation will increase to about 365,000 million VND/month, the tax payable will increase to 150 million VND/month instead of 2,2 million VND/month,” Ms. Nguyen calculated.
However, the problem that Ms. Nguyen is worried about is not only the tax increase, but "my husband and I are worried about whether the tax authority will base on the revenue after the declaration to collect the previous months of low-level lump-sum tax payments or not."
This is not only Ms. Nguyen's problem but also the concern of many business households when sharing their stories with Thanh Nien reporters. According to Mr. Le Van Tuan, Director of Keytas Tax Accounting Company Limited, the calculation of lump-sum tax and declared tax are not different. On the same revenue, the tax rate does not change, such as for goods it is 1.5%, for restaurants it is 4.5%... so the tax amount is the same. The only difference is that previously it was calculated on lump-sum revenue, but now when switching to declaration, it is calculated on actual revenue.
“But when calculating based on actual revenue, it may be higher than the previous contracted revenue. Therefore, some households are hesitant and react by closing their doors to wait and see how it is implemented. They are also worried that if the actual revenue is revealed, the tax payment will not only be higher but may also be collected for the previous period,” Mr. Tuan explained. According to Mr. Le Van Tuan, the tax authority recently said that if the actual revenue is 50% higher than the contracted revenue, the contracted revenue must be adjusted to increase the tax payment. However, the actual revenue is often many times higher than the contracted revenue, so now everyone is afraid to issue actual invoices. “The issue of collecting additional tax or not should have clear instructions so that business households can feel secure in implementing it,” Mr. Tuan suggested.
Small businesses are closing their stores en masse, 'Sales are like playing hide and seek'
In a meeting with 1,000 business households nationwide via face-to-face and online meetings last weekend, lawyer Tran Xoa, Director of Minh Dang Quang Law Firm, acknowledged: Business households are not only worried about the upcoming tax increase but also worried about having their past taxes collected when their real revenue is revealed. There are a few cases sharing that the tax authority announced to collect taxes for the years 2022, 2023, 2024 up to billions of VND, even low-income households are also 400 million VND.
“The tax authority discovered that there are households with annual revenue of 20 billion VND, 30 billion VND, and in some places up to 52 billion VND… based on invoices issued by the companies selling goods to these households. The tax authority should have clear information in writing after the business households declare their actual revenue whether they will be charged additional taxes for previous years and months or not so that they can feel secure in implementing it,” Mr. Tran Xoa suggested.
Proposal not to collect additional charges, to legalize inventory
One week after connecting cash registers with tax authorities, the problem that businesses are worried about is the lack of invoices and documents for the remaining goods. To cope, many small traders in some markets temporarily closed when the market management agency and tax authority came to inspect. Ms. Pham Lan (a clothing seller in Tan Binh District, Ho Chi Minh City) admitted that currently the garment manufacturing facility for her refuses to issue invoices, so she is having a headache not knowing what to do. The facility that sews her clothes also buys fabric, needles, threads, accessories, etc. without input invoices. "They also implement lump-sum tax but are afraid that if they go to the tax authority to ask for invoices to issue for themselves, it will generate additional taxable revenue, so they absolutely refuse," she explained.
Mr. Le Van Tuan suggested accepting the inventory of the previous period, when the business household did not have invoices to prove the input. Accordingly, the business household can take inventory and close the data of the previous period. From June 01, 06, if it has switched to a declaring business household, or from January 2025, 01, when all business households, regardless of revenue, must switch to declaration, it is mandatory to have input invoices. This helps the business household have a transition period. Mr. Tuan also admitted that this could lead to the legalization of goods of unknown origin on the market, but there is no other way.
In addition, Mr. Le Van Tuan also proposed not to collect taxes from business households for the previous period because the longer it takes, the more likely it is that business households will abandon their business activities. This is not good for both business households and the state. At the same time, the authorities should study and adjust the tax rate. The characteristic of business households is that they operate as family businesses, earning money by working, so the current tax rate is quite high. If you deduct the expenses that business households spend, including labor, they will not make that much profit.
Meanwhile, lawyer Tran Xoa informed that the tax authority has conducted a review of businesses selling goods to business households to know the real revenue. To cope, business households have reduced the number of goods they take to have invoices when the authorities inspect them, and the rest of the goods are bought on the market without invoices and documents at lower prices to make a profit. Therefore, the implementation of declaring output and input invoices this time will contribute to the fight against counterfeit goods, fake goods, and goods of unknown origin on the market.
Sharing the same view, Dr. Nguyen Ngoc Tu, lecturer at Hanoi University of Business and Technology, emphasized: Taxpayers' compliance with invoices and documents will contribute to the fight against counterfeit goods in the market. Goods must have a clear origin. Therefore, when purchasing goods, consumers should also request the seller to provide full invoices and documents. However, to avoid tax increases that shock businesses and encourage actual tax declarations, Mr. Tu recommended that state agencies consider exempting or reducing 50% of taxes in the first 2 years of declaration or exempting personal income tax.
In addition, in the initial implementation period, it is necessary to support the software implementation, exempt administrative penalties for violations in the use of invoices, and have time to guide them on how to implement. In cases where instructions have been given but they deliberately violate, then penalties will be imposed. "The goal of requiring business households to declare actual taxes this time is not necessarily to increase revenue but to aim for a digital economy, transparent and fair tax management... In order for business households to adapt to tax changes, there should be policies to support them," said Mr. Nguyen Ngoc Tu.
Business households with revenue of tens of billions of VND/year should become enterprises.
Taxpayers should comply with regulations, should not calculate revenue evasion as before or buy goods floating on the market, because currently the tax authority has a full database to review the revenue of business households. When violations are detected, the amount of tax collected and fines is up to 1.5 times the amount of tax avoided. For business households with high revenue, tens or hundreds of billions of VND per year, it is better to consider converting to an enterprise because expenses can be deducted (rent, salary, social insurance, etc.), not to mention policies to encourage business households to convert to enterprises such as tax exemption for 3 years, etc.
- Lawyer Tran Xoa
Article source: Thanh Nien Magazine
