The Ministry of Finance has just announced a draft submission to the National Assembly Standing Committee's Resolution on adjusting family deductions in personal income tax.
According to the content of the submission, the Ministry of Finance proposed 2 options to adjust the deduction level for submission to competent authorities for consideration.
In option 1, the Ministry calculates and adjusts the family deduction level according to the CPI growth rate as prescribed. According to the General Statistics Office, the CPI index from 2020 to 2025 is expected to increase by 21.24%, so consider adjusting accordingly as follows: The family deduction level for the taxpayer himself/herself will increase from 11 million VND/month to about 13.3 million VND/month; the deduction level for dependents will increase from 4.4 million VND/month to 5.3 million VND/month.
With option 2, the Ministry of Finance proposes to adjust the family deduction level according to the growth rate of per capita income and per capita GDP growth rate. According to the General Statistics Office, the fluctuation in per capita income index and per capita GDP growth rate from 2020 to 2025 increased by 40% and 42%, respectively.
Therefore, it is possible to adjust the family deduction for the taxpayer himself from 11 million VND/month to about 15.5 million VND/month; for dependents from 4.4 million VND/month to 6.2 million VND/month.
Taxpayers' family deductions could increase to VND13.3-15.5 million, according to the proposal of the Ministry of Finance (Photo: Manh Quan).
According to the Ministry of Finance, if the first option is implemented, the state budget revenue will decrease by VND12,000 billion; if the second option is implemented, the state budget revenue will decrease by VND21,000 billion. However, the decrease in revenue can be partially offset by the increase in revenue from other consumption taxes due to the increase in taxpayers' disposable income.
The new family deduction level will be implemented from the effective date of the Resolution and applied from the 2026 tax period. The Resolution is expected to be approved at the 50th Session (next October) of the National Assembly Standing Committee.
According to current regulations, the family deduction for individual taxpayers is 11 million VND and the deduction for each dependent is 4.4 million VND, maintained from July 2020. Individuals are deducted for insurance, family deductions, allowances, subsidies..., the remaining amount is the income used to calculate personal income tax.
However, this deduction is considered by most experts to be inappropriate in calculating personal income tax, when spending and living are increasingly expensive.
Personal income tax is the third highest source of revenue in the tax system, after value added tax (VAT) and corporate income tax.
In 2024, total state budget revenue will exceed VND2 million billion for the first time. Of which, personal income tax is estimated at VND189,000 billion, up 20% over the previous year.
Source: https://dantri.com.vn/kinh-doanh/de-xuat-nang-muc-giam-tru-gia-canh-len-cao-nhat-155-trieu-dong-20250721132040439.htm
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