Many shops have closed, driven by fears of stricter inspections over counterfeit goods and concerns about new tax policies.
The General Department of Taxation said a growing number of small shops across Vietnam have suddenly shut down in recent weeks, driven by fears of stricter inspections over counterfeit goods and concerns about new tax policies, many of which are based on misunderstandings.
Under Decree 70, only businesses with annual revenues of VND 1 billion (approximately USD 39,000) or more in sectors such as retail, food and beverage, hospitality, supermarkets, passenger transport and entertainment are required to issue e-invoices through point-of-sale (POS) systems and transmit transaction data to tax authorities.
According to the national tax management database, only 37,576 shops, about 1 per cent of the country's 3.6 million business establishments, are subject to this requirement.
"However, many shops unaffected by the regulation have voluntarily suspended operations out of the mistaken belief that all businesses must install POS systems, which they associate with costly upgrades and closer tax scrutiny," the Tax Department said in a recent statement.
According to data from the Area II Tax Sub-Department, 3,763 small businesses suspended or ceased operations in May in Ho Chi Minh City alone, coinciding with the authorities' ramp-up of Decree 70 implementation. Just 440 businesses, or 3.18 per cent, had revenues exceeding VND 1 billion and were actually subject to the e-invoice requirements. These 440 shops contributed about VND 1.4 billion (approximately USD 55,000) in tax revenue.
"This shows that most of those closing down were not required to adopt e-invoicing through POS systems," the Tax Department noted.
Authorities also cited broader economic challenges contributing to the closures, including sluggish domestic and global economic conditions, weakened consumer demand, and a shift in shopping behaviour from traditional retail outlets to e-commerce platforms.