The Ministry of Finance is seeking comments on the Resolution adjusting the family deduction level of personal income tax (PIT).

According to the draft Resolution of the National Assembly Standing Committee on adjusting the family deduction level of personal income tax, the Ministry of Finance proposed 2 options for adjusting the family deduction level to submit to competent authorities for consideration and decision.

Option 1: Adjust the family deduction level according to the CPI growth rate as prescribed.

According to the General Statistics Office, the CPI from 2020 to 2025 is expected to increase by 21.24%, so consider adjusting accordingly as follows: The family deduction for the taxpayer himself will increase from 11 million VND/month to about 13.3 million VND/month; the deduction for dependents will increase from 4.4 million VND/month to 5.3 million VND/month.

The Ministry of Finance assesses that this plan is in accordance with the current Personal Income Tax Law, closely following the basis for applying deductions according to essential needs of life and the level of inflation from the most recent adjustment time (2020).

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The Ministry of Finance proposed to increase family deduction to a maximum of 15.5 million VND/month.

Option 2: Adjust the family deduction level according to the growth rate of average income per capita and the growth rate of average GDP per capita.

According to the General Statistics Office, the fluctuation in per capita income index and per capita GDP growth rate from 2020 to 2025 increased by 40% and 42% respectively.

Therefore, it is possible to adjust the family deduction for the taxpayer himself from 11 million VND/month to about 15.5 million VND/month and the deduction for each dependent from 4.4 million VND/month to 6.2 million VND/month.

The Ministry of Finance believes that this option will contribute to reducing tax obligations for taxpayers at a higher level. If implemented according to this option, the budget will reduce revenue, but when the family deduction level is higher, tax payments will decrease, and people's disposable income will increase. Thereby, it will contribute to stimulating increased household spending, social consumption and indirectly help increase budget revenue from other sources in the medium and long term.

Specifically, if the first option is implemented, the state budget revenue will decrease by 12,000 billion VND; and if the second option is implemented, the state budget revenue will decrease by 21,000 billion VND.

However, according to the Ministry of Finance, the decrease in revenue can be partly offset by the increase in revenue from other consumption taxes due to the increase in taxpayers' disposable income.

The new family deduction level is expected to be implemented from the effective date of the Resolution and applied from the 2026 tax period.

Source: https://vietnamnet.vn/bo-tai-chinh-de-xuat-nang-giam-tru-gia-canh-len-cao-nhat-15-5-trieu-dong-thang-2424116.html