National Assembly delegates propose adjusting family deductions when increasing salaries

On the morning of May 29, continuing the 7th Session, the National Assembly discussed in the hall the additional assessment of the results of the implementation of the socio -economic development plan and the state budget in 2023; the implementation of the socio-economic development plan and the state budget in the first months of 2024; and many other important contents.

Family deduction level does not reflect real life

Highly appreciating the Government in managing the socio-economy, delegate Nguyen Thi Thuy ( Bac Kan Province Delegation) commented that the current family deduction level does not accurately reflect the reality of life.

National Assembly Delegate Nguyen Thi Thuy (Bac Kan Province Delegation) proposed that salaries increase but family deductions are not adjusted promptly.

The delegate said that according to regulations, the family deduction for taxpayers is 11 million VND/month and for each dependent is 4.4 million VND/month. Voters believe that the family deduction, especially the deduction for dependents of 4.4 million VND/month, is too outdated and needs to be reviewed and amended by the National Assembly soon, and should not wait another 2 years, meaning it will be approved by 2026 as proposed.

Delegate Nguyen Thi Thuy analyzed that the deduction for dependents is no longer suitable for current reality, especially in big cities, causing disadvantages for taxpayers. This deduction has been maintained since 2020, while in the past 5 years, many essential goods and services have increased, some essential goods even increased faster than income. According to statistics, compared to the price of goods in 2020, the price of education services increased by 17%, the price of food increased by 27%, especially the price of gasoline increased by 105%...

National Assembly deputies attending the 7th Session, 15th National Assembly

Many voters shared that if a family has small children, they have to hire a babysitter, and the salary for a babysitter alone is currently not less than 5 million VND/month; if a family has children going to school, the cost of education currently accounts for the majority of the family's spending structure... Therefore, if we have to wait another 2 years for the Personal Income Tax Law to be passed, many people will have to tighten their belts but still have to pay personal income tax.

Need to amend Personal Income Tax Law soon

Delegate Nguyen Thi Thuy analyzed the irrationality in the Consumer Price Index (CPI) basket of goods. According to the provisions of the Personal Income Tax Law, when the CPI fluctuates by more than 20%, the Government submits to the National Assembly Standing Committee an adjustment to the family deduction level.

At the regular press conference, the Ministry of Finance said that it has not adjusted the family deduction level because the CPI fluctuation is less than 20%, but many experts and voters believe that the Personal Income Tax Law and current regulations using the CPI fluctuation criterion of over 20%, which means it must be based on a basket of goods consisting of 752 items, is unreasonable. Meanwhile, essential goods that directly affect people's spending are only about 20 items, while waiting to calculate the average of 752 items will take a long time, even 6 to 7 years. This will not promptly reflect the fluctuations in spending of people and households.

Scene of the 7th Session, 15th National Assembly

According to delegate Nguyen Thi Thuy, the current family deduction regulations are not suitable for the conditions of a country with a low average income like ours. Most of people's income will be spent on essential goods and services (70%). According to a survey by experts from the National Economics University, for countries with high incomes, spending on essential goods and services only accounts for 30% -40%. Therefore, the current family deduction regulations will directly affect people's essential needs.

Furthermore, if wages increase but family deductions are not adjusted in time, and the wage reform policy is expected to be implemented from July 1, 2024, it will cause concern for workers, because when wages increase, taxable income will increase. Therefore, failure to adjust in time will directly affect the meaning of the wage reform policy.

From the above issues, delegate Nguyen Thi Thuy proposed that the Government promptly submit the amendment to the Personal Income Tax Law by the end of October 2024 and submit it to the National Assembly for approval in May 2025, in accordance with the Government's direction with the motto "year of determination, year of promotion and year of assurance".

Source: https://kinhtedothi.vn/dai-bieu-quoc-hoi-de-xuat-dieu-chinh-muc-giam-tru-gia-canh-khi-tang-luong.html