When the flow of law "touches" every smallest link of the economy

In the days adjacent to the Lunar New Year, which should be a time of exciting trade, many business households and small businesses are worried about the rapid changes in legal policies.

Source: The Saigon Times

Mr. T., the owner of a family restaurant. When he was informed that from June 2025 he would have to use electronic invoices to connect taxes every sale, he was surprised: "My pho shop is the main patron, there has never been an invoice issued before. Now that you install a cash register, connect to the network, print invoices for each bowl of pho, how can you serve it in time?".

Ms. Lan, a small trader at Pham Van Hai market, Tan Son Hoa Ward (Ho Chi Minh City), also expressed her concern: just one technical error in issuing invoices can make her face a fine of up to tens of millions of VND – an amount that "selling for a whole year is not sure to come out".[1]

In the North, at Tho Tang wholesale market (Phu Tho), many business households have temporarily stopped trading in the days adjacent to Tet because of concerns about new tax regulations and competitive pressure from e-commerce. The local government had to enter into dialogue to find a solution to support[2].

These stories show that the current legal flow has not only impacted large corporations, but has touched every smallest link of the economy – from business households, traditional small businesses to online sellers.

Small businesses are hit hard

Practice shows that the smaller the business, the more difficult it is to keep up with changes in legal policies and the more limited the ability to comply. If large corporations and companies face more complex regulations on governance and international integration, small and medium-sized enterprises as well as individual business households struggle to adapt to new obligations in their daily operations.

From June 1, 2025, all business households with a revenue of 1 billion VND/year or more are required to use e-invoices generated from cash registers that are directly connected to the tax authority's data system[3]. This shows that not only the "big guys", business households and small business individuals are also strongly affected by the flow of Vietnamese laws that are strongly adjusting. These adjusted regulations aim to modernize tax management, gradually replace the flat tax collection method, increase transparency and accuracy in revenue recording of business households. This is a positive change in the long term, but in the immediate future, many small business households have been embarrassed by new technology, incurring costs for purchasing equipment and software and the risk of being sanctioned if violated. In fact, if invoices are not issued in accordance with regulations or data connection in time, business households may be fined a large amount of money for each violation, which is a great pressure for small traders who are used to doing business according to old habits.

The confusion of the people reflects the reality that many small business households are struggling to adapt to the new legal requirements. Owners of traditional grocery stores and small markets also face the problem of learning how to use invoicing software and updating tax accounting knowledge. These are things that go far beyond their traditional business experience for a long time.

The flow of the 2025 law has crept in, affecting all businesses. If large enterprises are under pressure to upgrade their governance to suit the new standards, small and medium-sized enterprises and business households will no longer be immune to the law. From urban to rural, from listed companies to sidewalk shops, no one can "stand on the sidelines" of this flow. Instead, they all had to learn to swim in the current, or they didn't want to be left behind.

Source: The Saigon Times

Opportunities and challenges go hand in hand

Strong legal flows bring both benefits and challenges to the business community. On the downstream journey, there are sections of calm water that open up development opportunities, but there is also no shortage of rapids that require businesses to steer carefully.

On the positive side, it is clear that the 2025 law changes are aimed at the ultimate goal of improving the business environment. Administrative procedure reforms help reduce the burden of paperwork, save time and costs for businesses in the long run. The simplification of business conditions and standardization of processes in business law will create more favorable conditions for start-ups and business operations. The new tax and financial policies are aimed at transparency and fairness, preventing tax evasion and transfer pricing, contributing to creating a level playing field between domestic enterprises and FDI enterprises. For example, the regulation forcing e-commerce platforms to deduct and pay taxes on behalf of sellers on the floor from 2025 will help collect taxes more fully and relieve the burden of declaration for small business households selling goods online[4].

In addition, many preferential and support policies have also been issued to exempt and increase the revenue subject to flat tax for business households; reducing corporate income tax for the first two years and 50% for the next four years for start-up technology enterprises; Expanding participation and increasing social insurance benefits for employees will help businesses retain skilled workers. These reforms, if implemented effectively, will help improve productivity, reduce hidden costs and raise the level of corporate governance, thereby increasing the competitiveness of the whole economy.

However, this strong legal flow creates costs that every business organization has to face. First, the law changes quickly and is unpredictable, and many new requirements are compliant, making businesses unprepared to adjust business activities.

The overlap between laws, decrees and circulars is still a matter of concern. Enterprises that comply with the guidance of one ministry may be entangled in the regulations of other ministries. There are many opinions that "the law is not scary, the scary is the circular, the guiding letter", because the documents under the law change quickly and the application is sometimes inconsistent.

In order for the law to truly become a driving force for development, rather than a burden, it is necessary to make some adjustments in the way policies are formulated and implemented. Especially for individuals and small business organizations that account for the majority of Vietnam but are the most vulnerable to changes in national business policies.

Firstly, it is necessary to simplify procedures and reduce unnecessary requirements for business households and small businesses.

Secondly, it is necessary to strengthen uniform implementation guidance among localities, limiting the situation of "each place understands one type". The State, with its management role, at this somewhat sensitive and difficult time, instead of looking to business households with strict management roles, machines should become companions, supporting business households and small businesses in new compliance activities.

Third, the State needs to have a reasonable transition roadmap when applying new regulations, helping businesses have time to prepare financially, personnel and systems.

A good legal system is not only for sanctioning, but for businesses to know how to go right before making mistakes due to unintentional errors.

Lawyer Nguyen Van Phuc

HM&P Law Firm

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