Struggling every penny still has to pay personal income tax

How much income must be taxed?

In essence, the regulations on deductions before tax calculation ensure the principle that individuals need to have a certain level of income to meet the essential needs of life such as food, accommodation, travel, and study. , medical examination and treatment... Therefore, only income above this threshold must be taxed.

According to the Ministry of Finance, with the current deduction for the taxpayer himself/herself of 11 million VND/month and for each dependent of 4,4 million VND/month, people with income from salaries and wages are at 17 million VND/month (if there is 1 dependent) or 22 million VND/month (if there are 2 dependents) after deducting social insurance, health insurance, unemployment insurance... is still the same. do not have to pay personal income tax. 

For individuals with income less than 120 million VND/month, according to current regulations, the amount of personal income tax payable compared to income is less than 20%.

Specifically: an individual with an income of 40 million VND/month must pay personal income tax at 6,56%/income.

With an income of 60 million VND/month, the personal income tax payable is 11,74%/income.

With an income of 80 million VND/month, the personal income tax payable is 15,55%/income.

With an income of 100 million VND/month, the personal income tax payable is 18,44%/income. 

For individuals with high income over 120 million VND, the personal income tax payable is at a rate higher than 20%/income.

Specifically: an individual with an income of 120 million VND/month must pay personal income tax at 21,2%/income; income of 150 million VND/month, the personal income tax payable is 23,96%/income... This calculation assumes the individual has 1 dependent, in case the individual has more than 1 dependent, the Tax payable is also correspondingly lower. 

The Ministry of Finance calculated like that, but recently, many comments have commented that the family deduction level is still low. In addition, there are also opinions that it is necessary to regulate the level of family deductions according to the regional minimum wage, and the family deductions in urban areas and big cities need to be higher than in rural and mountainous areas. due to the more expensive cost…

In fact, many families are having to "pull every penny" for living expenses while still having to pay personal income tax, especially in big cities.

Like Ms. Nguyen Thi Huong's family in Hanoi, these days, she and her husband are starting to settle personal income tax. The couple's monthly income is about 36 million VND. With this income level, after deducting family circumstances with two children, Huong and her husband still have to pay personal income tax. Although the amount of personal income tax she has to pay is not much, it still makes her feel angry.

“The family's monthly expenses are always in short supply after having to pay in installments to buy an apartment of 11 million VND each month; 3 million VND to support elderly parents monthly; Electricity, water, and living expenses for the couple and two children. 

The children's family deduction amount is only enough to cover their monthly education. While parents are not counted as deductions because they have a pension of more than 2 million VND/month. I don't have enough income but still have to pay taxes, I find it really inadequate," Ms. Huong said.

Medical and educational expenses should be reduced

Citing experience from other countries, the Ministry of Finance said: Most countries' personal income tax laws have regulations on family deductions in different forms and ways. 

Regarding classification, personal income deductions applied by countries are divided into three groups.

One is General deductions for individual taxpayers. The application of general deductions in many countries also aims to exclude low-income subjects from paying personal income tax. Thereby, reducing the burden on tax authorities in tax management and settlement, especially when the amount of tax collected from subjects with income below the threshold often accounts for a small proportion while the cost of collection management for taxpayers is low. These objects are usually not small. Because the living needs of individual taxpayers are very different (different consumption needs, different consumption characteristics of each region...), experience from other countries also shows that offering deductions is always appropriate. This is an issue that often has many different opinions. 

Secondly Deductions for dependents, such as deductions for children, spouses, parents, etc. These are deductions applicable to people that the taxpayer must care for (dependents). However, the scope of dependents of each country is also different and has different criteria. The deduction level for dependents is often set lower than the deduction level for individual taxpayers. 

Some countries have controls on the number of dependents who can be counted as deductions (for example, Thailand, Indonesia, Malaysia...), but there are also many countries that do not control them (for example, the US, UK). There are also countries that do not set separate deductions for dependents and individual taxpayers, but instead set a general level (for example, China...).

Two deduction methods are being applied in Vietnam. In addition, some countries also Develop deductions of a specific nature (for example, deductions for medical, educational expenses...). These are deductions that taxpayers are entitled to when they meet certain criteria, such as spending on items that the state needs to encourage (such as health care, education, etc.) .

Accordingly, the scope of these deductions is also very diverse. Some countries allow deductions for social insurance and health insurance payments... to encourage people to participate in these services. Some countries allow deductions for children's education expenses, some countries allow deductions for installment home loan interest (to encourage people to own homes) or charitable contributions. . 

Looking at this aspect, lawyer Truong Thanh Duc, Director of ANVI Law Firm, assessed: It is necessary to amend the Law on Personal Income Tax to comply with the principles, because the nature of tax is revenue minus expenses and having income is a must. taxpayer. Therefore, the expenses of the taxpayer and family members such as children's school fees, medical examination and treatment fees, money to buy a house, build a house, rent a house... must be specifically stipulated in the law to be deducted first. How to calculate personal income tax?

Allowing expenses to be deducted when calculating personal income tax if there is an invoice is also something that a tax expert has proposed for many years. Mr. Chung Thanh Tien, Accounting Association Understand correctly - Do right, each analysis: The tax authority can keep the deduction level but deduct a percentage of actual expenses if there is documentation with the taxpayer. At that time, tax returnees and tax authorities will know which party is evading taxes.

This is also a motivation for people to get invoices - an issue the tax industry is promoting in many forms, including "invoice lottery". Business establishments will not be able to hide their revenue. According to this person, allowing buyers to deduct taxes when they have documents to a certain extent will contribute to bringing benefits to the budget and "reducing the need to negotiate and split the presumptive tax that has been happening recently." is a problem.

Next article: Regarding personal income tax, people still have to wait for the Law to be amended 

Carrying sticky rice to drive a box of billions and personal income taxIn reality, salaried workers whose income only exceeds 11 million VND/month have to pay personal income tax if they have no dependents, while people who are self-employed "trade for nothing" of their income. high, almost no need to pay this tax.