Proposal to increase family deduction to 15.5 million VND

The Ministry of Finance has just submitted a draft resolution to the Standing Committee of the National Assembly on adjusting the personal income tax deduction for dependents, applicable to the tax year 2026.

Accordingly, citing data published by the General Statistics Office, the CPI increased by 3.23% in 2020, 1.84% in 2021, 3.15% in 2022, 3.25% in 2023, and 3.63% in 2024.

The Ministry of Finance proposes increasing the personal allowance to 15.5 million VND (Illustrative image)

Resolution 192 of the National Assembly supplements the socio -economic development plan for 2025 with the goal of achieving a growth rate of 8% or higher, in which Clause b of Article 1 adjusts the target to "Average CPI growth rate of approximately 4.5 - 5%".

The Ministry of Finance believes that, with the projected CPI fluctuation of 4.5-5% in 2025, the CPI fluctuation from 2020 to 2025, as calculated by the General Statistics Office, will exceed 20% (approximately 21.24%).

Therefore, the Ministry of Finance believes that, based on the provisions of Clause 4, Article 1 of Law No. 26, it is necessary to study and adjust the personal income tax deduction for dependents.

The Ministry of Finance proposes increasing the personal income tax deduction for dependents from VND 11 million to a maximum of VND 15.5 million per month, effective from the 2026 tax year.

Specifically, the Ministry of Finance has proposed two options for adjusting the personal allowance deduction level for submission to competent authorities for consideration and decision-making as follows:

Option 1: Adjust the personal allowance deduction according to the CPI increase rate.

Under this plan, the personal tax deduction for the taxpayer increases from 11 million VND/month to approximately 13.3 million VND/month. The deduction for each dependent increases from 4.4 million VND/month to 5.3 million VND/month.

The Ministry of Finance assessed that this plan is in accordance with the current Personal Income Tax Law, ensuring essential living needs and taking into account inflation since the most recent adjustment (2020).

Option 2: Adjust based on the growth rate of per capita income and the growth rate of per capita GDP.

Accordingly, the tax deduction for taxpayers increased from 11 million VND/month to 15.5 million VND/month; the deduction for dependents increased from 4.4 million VND/month to approximately 6.2 million VND/month.

The Ministry of Finance believes that this plan will contribute to a greater reduction in tax obligations for taxpayers, allowing people to benefit from socio-economic development and improve their living standards.

Implementing this plan will have a greater impact on reducing state budget revenue. However, with a higher personal allowance, less tax will be paid, and people's disposable income will increase. This will, in turn, stimulate increased household spending and social consumption, and indirectly help increase budget revenue from other sources in the medium and long term.

Thus, under both options proposed by the Ministry of Finance, the personal allowance for taxpayers would increase by 2.3-4.5 million VND; and for dependents by 900,000-1.8 million VND/person/month compared to the current rates.

Source: https://baolaocai.vn/de-xuat-nang-giam-tru-gia-canh-len-155-trieu-dong-post649401.html