Ministry of Public Security proposes to exempt income tax on salaries from the budget

This content is stated in the recent comments of the Ministry of Public Security on the draft Law on Personal Income Tax (amended).

Illustration photo.

Currently, individuals with income from salaries and wages pay taxes according to the progressive tax schedule, regardless of whether the paying unit is within or outside the state budget.

However, the Ministry of Public Security proposed that the Ministry of Finance study the exemption of personal income tax on salaries and wages paid from the budget. This Ministry cited the provisions of the State Budget Law 2025, stating that tax revenue, including personal income, is budget revenue. Therefore, the State paying salaries to employees, then collecting taxes on this same amount to submit to the budget, creates processes, procedures, and personnel to implement.

Responding to this proposal, the Ministry of Finance said that the Personal Income Tax Law applies uniformly to all individuals with income reaching the tax threshold. Therefore, tax exemption for salaries and wages from the budget is inappropriate and can easily cause public reaction.

"Individuals must pay equal taxes when they have the same taxable income, regardless of whether they are in the public or private sector," the Ministry of Finance stated. The same principle applies to family deductions.

However, the Ministry of Finance said it is considering tax exemption for salaries and wages from science, technology and innovation tasks using the budget.

In addition to wages and salaries, the Ministry of Public Security also suggested studying tax exemptions for overtime pay, hardship allowances or severance pay. According to them, these incomes are meant to motivate or compensate for risks for workers. "Taxing will reduce the incentive of bonus policies, causing disadvantages for workers, especially those who work overtime and night shifts," the Ministry of Public Security acknowledged.

However, according to the Ministry of Finance, this content is already included in the current Personal Income Tax Law and will continue to be kept in this revised law.

Meanwhile, the Ministry of Industry and Trade proposed that expenses such as living expenses, allowances (war, concurrently...) and other regimes for Vietnamese officials abroad should not be considered as salaries, so they should be exempt from tax. In response, the Ministry of Finance acknowledged and said it would study and supplement when drafting a decree guiding the law.

Personal income tax is the third largest source of revenue in the tax system, after VAT and corporate income tax. Last year, total state budget revenue exceeded VND2 quadrillion for the first time, of which personal income tax was estimated at VND189 trillion, up 20% over the previous year. The proportion of this tax type accounted for more than 9.3% of total budget revenue, up from 5.3% in 2011.

The draft Law on Personal Income Tax (amended) will be submitted to the National Assembly for consideration and approval at the October session.

According to VnExpress

Source: https://baobacninhtv.vn/bo-cong-an-de-xuat-mien-thue-thu-nhap-voi-tien-luong-tu-ngan-sach-postid426585.bbg