The Ministry of Finance has just released a draft submission to the Standing Committee of the National Assembly regarding the adjustment of the personal income tax deduction for dependents.
According to the submission, the Ministry of Finance proposed two options for adjusting the deduction amount for consideration by the competent authority.
Under Option 1, the Ministry calculates adjustments to the personal allowance based on the CPI increase rate as stipulated. According to data from the General Statistics Office, the cumulative CPI from 2020 to 2025 is projected to increase by 21.24%, therefore the following adjustments would be considered: The personal allowance for the taxpayer themselves would increase from 11 million VND/month to approximately 13.3 million VND/month; the allowance for dependents would increase from 4.4 million VND/month to 5.3 million VND/month.
Under Option 2, the Ministry of Finance proposes adjusting the personal allowance deduction based on the growth rate of average per capita income and the growth rate of average per capita GDP. According to data from the General Statistics Office, the fluctuations in the average per capita income index and the growth rate of average per capita GDP from 2020 to 2025 are projected to increase by 40% and 42%, respectively.
Therefore, the personal tax deduction for the taxpayer themselves could be adjusted from 11 million VND/month to approximately 15.5 million VND/month; and for dependents from 4.4 million VND/month to 6.2 million VND/month.
The personal allowance for taxpayers could reach 13.3-15.5 million VND, according to a proposal from the Ministry of Finance (Photo: Manh Quan).
According to the Ministry of Finance, implementing the first option would result in a reduction of 12,000 billion VND in state budget revenue; implementing the second option would result in a reduction of 21,000 billion VND. However, this reduction could be partially offset by increased revenue from other consumption taxes due to the increase in taxpayers' disposable income.
The new personal allowance will be implemented from the date the Resolution takes effect and will apply from the 2026 tax year. The Resolution is expected to be passed at the 50th session (next October) of the National Assembly Standing Committee.
According to current regulations, the personal allowance for taxpayers is 11 million VND and the allowance for each dependent is 4.4 million VND, maintained since July 2020. Individuals are allowed to deduct insurance contributions, personal allowances, subsidies, etc., with the remaining amount being the basis for calculating personal income tax.
However, this deduction is considered by most experts to be inadequate in calculating personal income tax, given the increasing cost of living.
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 exceeded 2 trillion VND for the first time. Of this, personal income tax is estimated to reach 189,000 billion VND, an increase of 20% compared to 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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