An exemption from collecting and paying value-added tax in Vietnam for small businesses, currently set at VND 100 million or about US$4,000, could be raised to VND 350 million or US$14,000 under reforms proposed by Can Tho City and reported by Tuoi Tre. There is a proposal currently on the table, from the Ministry of Finance which will be responsible for any reform, to set the exemption limit at VND 200 million or US$8,000, however, it has been argued that this is still too low.
Of note, the original VND 100 million limit was first set in 2013 and has not been increased since. GDP per capita during that time, however, has gone from just US$2,367 in 2013 to US$4,163 in 2022, according to World Bank data. With this in mind, the benefits of said existing VAT exemption have come down considerably.
The outcome of this debate is unlikely to have any direct impact on foreign invested enterprises in Vietnam, it is, however, worth bearing in mind when considering in small business investments in Vietnam.