A souvenir seller holding a traditional handheld fan waits for customers in Hanoi on June 17, 2025. (Photo by Nhac NGUYEN / AFP)
HANOI: Nearly 3,000 small businesses in Hanoi ceased operations in May and June, with tax authorities confirming that the shutdowns were largely driven by fear of inspections and concerns over counterfeit goods, rather than recent e-invoicing requirements.
According to the regional tax department, 2,961 small businesses suspended operations during the two months.
However, only 263 of these, equivalent to just 8.8%, were subject to mandatory use of e-invoices under a government decree.
This suggests the new tax policy did not trigger the closures, as some had speculated.
Tax officials attribute the wave of shutdowns to mounting anxiety among vendors over the possibility of being inspected for selling counterfeit, unlabelled or poor-quality goods, particularly in major markets such as Ninh Hiep, Dong Xuan, Long Bien, La Phu and commercial streets like Hang Ngang and Hang Dao.
These areas are known for selling clothing, fabric, cosmetics, confectionery and other consumer goods.
“Business owners are not closing down because of e-invoices. They are worried about enforcement actions and traceability of their goods, especially those of unclear origin,” said a representative from the tax office.
There is also concern among some vendors that issuing e-invoices could reveal higher actual sales than previously declared under the flat-tax system, potentially leading to retroactive tax adjustments.
However, tax authorities clarified that under current regulations, any adjustment to flat-tax levels is only made from the point when significant revenue changes are detected, not retroactively.
The e-invoice policy applies only to households with annual turnover above one billion dong or about US$38,000 and aims to improve tax transparency without altering existing tax obligations.
Out of over 311,000 registered business households in Hanoi, just 4,979, or 1.6%, fall under this requirement.
Despite early challenges, compliance has been strong.
As of June 11, 4,379 businesses subject to the policy had registered for point-of-sale-based e-invoices. — Viet Nam News/ANN
