HCMC Tax Department supports thousands transitioning to self-declaration system

December is the peak period for tax authorities and local units to organize information sessions and answer questions regarding the transition from presumptive tax to the self-declaration method. Despite these efforts, business households continue to raise numerous questions about conversion methods and new tax calculations, flooding major tax forums.

“I am in Group 3, revenue from VND3 billion to 50 billion/year (US$114,000 – 1.9 million). After counting inventory, what do I do next? I’m so confused,” one business owner asked. Inventory is a major source of anxiety, particularly for goods lacking input invoices.

Linh, a clothing merchant in Thu Duc Ward with an annual revenue of about VND2 billion ($78,500) and current inventory worth VND1 billion ($39,250), shared: “I’ve lost sleep and even weight over this.”

Meanwhile, Nguyen Van Lanh, a plumbing and electrical supplies merchant in Vuon Lai Ward, said software providers have been stationed at his shop for 3-4 days to help list over a thousand inventory items. “It is extremely hard work. Without help, I honestly couldn’t do it,” Lanh shared.

Another issue is expense deduction. Hoang Tuan, a fashion retailer in Ben Thanh Ward, noted that while his annual revenue exceeds VND3 billion, his staff works part-time without labor contracts or social insurance, making it impossible to claim wages as deductible expenses. Even for premises rental, the landlord refuses to issue invoices for him to deduct costs.

This regulation concerns many because taxing profit (revenue minus expenses) is often more beneficial than taxing revenue. However, proving expenses is not simple. Additionally, rumors about the “seizure” of assets belonging to family members if a business household cannot pay administrative fines have further fueled panic.

While many worry, others have proactively converted. “I have to do it sooner or later. January 1, 2026, is the year-end peak sales season, so I’d rather suffer now to enjoy later. I’m trying to finish it early to focus on selling,” said Than, a food merchant in HCMC who recently switched to the declaration method. He admitted he was initially worried but found the tax officers very helpful.

Sharing the anxiety, Minh Son, a business owner in HCMC, visited the city tax office and was guided to sign a commitment to switch to declaration starting January 1, 2025. “The tax officer told me to do business with peace of mind and not to worry. When the policy is finalized, the tax authority will notify each household. Hearing that, I felt relieved; I thought if I didn’t do it immediately, I’d have to close shop,” Son said.

The HCMC Tax Department reported that 100 percent of presumptive tax households in the area were surveyed and mobilized for conversion by December 15, fifteen days ahead of schedule.

Over 35,000 presumptive households have switched to declaration, and 666 have upgraded to enterprise status. 98 percent of households have electronic tax accounts, with 92 percent using eTax Mobile; 22,646 households use electronic invoices from cash registers (accounting for 86 percent), surpassing the national average.

Doan Minh Dung, Head of the HCMC Tax Department called these results encouraging, noting that HCMC has nearly 346,000 business households, comprising about 13 percent of the national total. Currently, one HCMC tax official manages over 700 households.

The goal of the conversion is not merely to increase revenue but to create a new development space for businesses to grow, professionalize, and gain confidence. Following that motto, the HCMC Tax Department will accompany, support, and reform to effectively implement the new tax management model.

Currently, the decree on declaration, calculation, payment, and e-invoice use for business households is being drafted by the Ministry of Finance for public opinion. Tax experts advise that besides registering for conversion, listing inventory, and using e-invoices, households should remain calm and await official regulations rather than letting panic affect business operations.

In a recent talk show, a business owner expressed concern about retroactive tax collection, fearing that while their presumptive revenue has historically been a few hundred million VND, their declared revenue in 2026 might jump to several billion.

Nguyen Tien Minh, Deputy Head of the Hanoi Tax Department, suggested viewing this revenue increase in “a very ordinary context.” Specifically, business conditions may have improved this year compared to previous years. If revenue increases, tax authorities have no reason to collect back taxes, so households can be completely reassured.