Proposal to apply 35% personal income tax on taxable income over 100 million VND/month

According to the Law on Personal Income Tax (amended), the tax schedule has 5 levels. The last tax rate is 35%, applied to taxable income over 100 million VND/month.

Amending the personal income tax table to 5 levels

On the morning of November 4, the Minister of Finance , authorized by the Prime Minister, presented the Report on the draft Law on Personal Income Tax (PIT) (amended).

The draft Law on Personal Income Tax (amended) consists of 4 Chapters and 29 Articles, regulating taxpayers, taxable income, tax-exempt and tax-reduced income, and the basis for calculating personal income tax.

Minister of Finance Nguyen Van Thang presents a report on the draft Law on Personal Income Tax (amended). Photo: National Assembly Media

The draft law adjusts the progressive tax schedule applicable to resident individuals with income from salaries and wages by reducing the number of tax brackets from 7 to 5 and widening the gap between the brackets.

The plan submitted to the National Assembly is as follows:

Amending the Tax Schedule to 5 levels with the distance between levels increasing gradually to 10, 20, 30, 40 million VND and tax rates of 5%, 15%, 25%, 30%, 35%. The final tax rate is 35% applied to taxable income over 100 million VND/month.

The progressive tax schedule is stipulated in the draft Law on Personal Income Tax (amended) submitted to the National Assembly on the morning of November 4. Screenshot

According to calculations, along with the adjustment of the new family deduction level, this tax adjustment plan will reduce revenue by about 27,400 billion VND/year.

According to this plan, the mobilization rate of most tax levels will be reduced compared to the current level. However, based on the opinions of the reviewers, the opinions of the discussion groups and the halls of the National Assembly Deputies, the Government will conduct a comprehensive study and make additional and thorough assessments to ensure reasonableness, and report to the National Assembly for consideration.

In addition, the draft Law also adjusts the income threshold to determine taxable income for some income sources such as income from winning prizes, royalties, franchises, inheritances, and gifts from 10 million VND to 20 million VND; Amends regulations on family deductions, deductions for charitable and humanitarian contributions; Corrects some words and timing of determining taxable income to ensure clarity in implementation,...

Continue to specify the family deduction level

Regarding the content of the revenue level of business individuals not subject to personal income tax (from 200 million VND/year or less, similar to the provisions of the Law on Value Added Tax), in the audit report, Chairman of the National Assembly's Economic and Financial Committee Phan Van Mai said that this tax-free revenue threshold is too low compared to business practice and does not ensure fairness when compared with the income level of salaried employees with family deductions.

Chairman of the National Assembly's Economic and Financial Committee Phan Van Mai. Photo: National Assembly Media

Therefore, the review agency recommends that the Drafting Agency calculate and adjust the tax-free revenue level of individual business owners to be more equal and consistent with the family deduction level (accordingly, this threshold level of the Law on Value Added Tax can be adjusted at the same time).

In addition, this revenue threshold is directly related to the rights and obligations of taxpayers, which needs to be stipulated in the Law to ensure the authority of the National Assembly and clarity and transparency for taxpayers. Therefore, it is proposed to remove the provision in Clause 4, Article 7 of the draft Law.

Regarding the Progressive Tax Schedule (Article 9), many opinions are concerned about the reasonableness of the plan to adjust the income thresholds and corresponding tax rates in the Tax Schedule because some taxable income ranges of the draft Law create a greater personal income tax burden for taxpayers while most other taxable income ranges create lower tax obligations than the current Law. This does not ensure fairness for taxpayers among income groups.

The auditing agency also believes that the regulation on family deductions is an important content and one of the bases for taxpayers to determine their tax obligations, therefore, receiving special attention from the people and society.

Actual implementation over time and experience from other countries show that the family deduction level is not actually adjusted too frequently or continuously and is not an urgent matter that needs to be regulated by the Government to ensure flexibility and timeliness.

Therefore, it is proposed to continue to specify the family deduction level in the draft Law, and at the same time assign the Government to submit to the Standing Committee of the National Assembly for consideration and adjustment of the family deduction level if necessary, in accordance with actual needs as expressed in the current Personal Income Tax Law; supplement specific family deduction levels and remove the provision assigning the Government to prescribe the family deduction level in Clause 1, Article 10, and at the same time remove the provision in Clause 3, Article 29 accordingly.

Laodong.vn

Source: https://laodong.vn/thoi-su/de-xuat-ap-thue-tncn-35-voi-thu-nhap-tinh-thue-tren-100-trieu-dongthang-1603306.ldo