Many benefits on tax from transferring business household into enterprise

	Solving the issue on the budget and business interests
	Transform business households into enterprises: Do not force them to transform
	There will be a list including units, households, individuals that have high risk in selling and providing retail bills

Many business households have large revenues but they are still afraid of transferring into enterprises due to procedures and costs incurred. Photo: Thuy Linh

Afraid of troublesome?

Currently, Vietnam has about 5 million business households which are considered as main subjects to further develop the number of enterprises, contributing to the achievement of the target by 2020 that Vietnam has 1 million operating enterprises in the spirit of Resolution 35 / NQ-CP of the Government on enterprise support and development. However, the fact that one of the greatest causes hindering desire of transferring from household business into business is the increase in costs, administrative procedures.

Another reason is that many business households concern about inspections, especially tax inspection when being enterprises. “If establishing an enterprise with the lack of experience in settlement of dossiers, documents, and invoices, and when the enterprise is inspected, especially inspected on tax, penalties for small or big breach are unavoidable.

We operate as a small business household without employees with medium income, so that we do not want to spend any unnecessary expenses”. shared by an owner of a Cafeteria in Hoang Mai district, Hanoi.

The Taxation will remove obstacles

Before concerns of business households, Mr. Nguyen Dai Tri, Deputy Director General of Taxation (Ministry of Finance) confirmed that tax obligation of business household and enterprise is similar and not different. Mr. Tri said that business households are being imposed poll tax every year. The poll tax rate is surveyed on the actual revenues of business household, then Tax office will publicize it and consult other business households as well as Tax Consultancy Board at ward or commune level. When the poll tax is publicized, benefits thereof will be revealed and anyone also has the right to query developed business households with large customers and large incomes but they carry out fewer obligations than business households with lower income. The cross-monitoring process promotes publicity and transparency in business and at present, it is necessary for the Tax law. At the same time, the tax authorities have many measures to ensure the poll tax rate for business households publicly and transparently to prevent the agreement between the Tax office and business household for tax evasion.

According to Ms. Le Thi Thuy, Deputy Director of the Department for Propagation and Taxpayer Assistance under the General Department of Taxation, said that the business households are afraid to become enterprises due to fear of being inspected by inspection teams, especially tax inspectors, which is unfounded. As explained by Ms. Thuy, as being an individual business household, the tax inspectors still inspect tax every year to review its revenues and impose the poll tax rate. And as being an enterprise, the inspection and examination of the Tax office are based on the risk application. “If an enterprise operates publically and transparently and their dossiers and documents are clear, there will be no reasons to meet the tax inspectors”, Ms. Thuy stated.

The representative of the General Department of Taxation said that the Taxation is studying more solutions to gradually better manage the turnover of business households such as supervision through the use of money counters; propagation so that consumers are accustomed to taking invoices to monitor revenues of business households against the tax losses and ensure the business equity.

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In particular, Mr. Nguyen Dai Tri noted that the Taxation is also studying solutions to support business households to become enterprises. Because large business households with revenues of hundreds of billions of dong each year and use of many bills (such as restaurants, hotels, etc.), the application of poll tax are not appropriate, and easily exploited to dodge tax.