Proposal to specify in the law the level of family deduction

The Government proposes to adjust family deductions for taxpayers and dependents.

The majority of opinions of the Standing Committee of the National Assembly's Economic and Financial Committee suggested that the Law should specifically stipulate the family deduction level for taxpayers and dependents as expressed in the current Law on Personal Income Tax (PIT) to ensure authority, clarity and transparency.

The above content is stated in the preliminary examination report of the Draft Law on Personal Income Tax (amended), which will be commented on by the National Assembly Standing Committee on the afternoon of October 13, during the 50th session.

The Government's submission clearly states the purpose of promulgating the Law on Personal Income Tax (amended) to expand the tax base; review, amend and supplement regulations on taxpayers and taxable income; study and adjust the threshold and personal income tax rates for some types of income to ensure consistency with the nature of each type of income and the regulatory objectives of personal income tax.

Along with that, research is needed to adjust the family deduction level for taxpayers and dependents, amend and supplement regulations related to a number of specific deductions to suit the new context; reduce the number of tax brackets of the progressive tax rate table applied to income from salaries and wages to contribute to simplifying the tax table.

Some notable amendments this time are for business individuals, the draft stipulates that the tax-free revenue level for business income is consistent with the tax-free revenue level prescribed by the Law on Value Added Tax (VND 200 million/year or less) and assigns the authority to the Government to regulate and adjust this level.

Notably, to ensure more comprehensive resolution of practical problems in determining deductions before calculating personal income tax for individuals with income from salaries and wages, contributing to reducing the tax burden for taxpayers and ensuring consistency with the socio-economic development situation in the recent period and development trends as well as international practices, the draft Law proposes to amend the regulations on family deductions for individual taxpayers and dependents.

According to the current Personal Income Tax Law, individuals are entitled to deduct social insurance, health insurance, unemployment insurance, professional liability insurance for certain occupations that require compulsory insurance, minus family deductions, charitable and humanitarian contributions, allowances and subsidies as prescribed... the remaining amount is the income used as the basis for calculating personal income tax.

With the current deduction for the taxpayer himself of 11 million VND/month and for each dependent of 4.4 million VND/month, a person with income from salary and wages of 17 million VND/month (if having 1 dependent) or 22 million VND/month (if having 2 dependents) after deducting social insurance, health insurance, unemployment insurance, etc., currently does not have to pay personal income tax, the submission clearly stated.

The Government said that it has drafted a Resolution of the National Assembly Standing Committee to adjust the family deduction level to submit to the National Assembly Standing Committee at the October 2025 session in the direction of increasing it higher than the current level by more than 40% (equivalent to 15.5 million VND and 6.2 million VND - according to the growth rate of average income per capita and GDP growth rate per capita).

The preliminary review report of the Standing Committee of the Economic and Financial Committee stated that the Draft Law amends the provisions on family deductions in the direction of assigning the Government to prescribe family deductions appropriate to the socio-economic situation in each period and assigning the Ministry of Finance to prescribe income levels to determine individuals who are dependents and are eligible for family deductions.

The Standing Committee of the Review Committee believes that the proposal to amend and supplement the regulations on family deduction levels is necessary to suit the current situation and the regulations on family deduction levels are one of the important contents, receiving special attention from the people and public opinion in the process of amending and supplementing the Law, and is one of the important bases for taxpayers to determine their tax obligations to the State.

In practice, adjusting and amending the provisions of the current Law on family deductions and through studying the experiences of other countries, the review and adjustment of family deduction levels is basically not a matter that needs to be carried out regularly and continuously, and does not pose the necessity or urgency of having to assign the Government to regulate to ensure flexibility and timeliness.

Therefore, the majority of opinions in the Standing Committee of the Review Committee proposed that the Law should specifically stipulate the family deduction level for taxpayers and dependents as expressed in the current Law on Personal Income Tax (specifically stipulating the family deduction level for taxpayers and dependents at the same time, stipulating the Government's authority in submitting to the National Assembly Standing Committee for consideration and adjustment of the family deduction level in accordance with price fluctuations in the case of consumer price index fluctuations at a certain rate compared to the time the Law takes effect) to ensure authority and clarity and transparency.

Source: https://baodautu.vn/de-nghi-quy-dinh-cu-the-trong-luat-muc-giam-tru-gia-canh-d411254.html