The proposed family deduction level is still low.
Mr. Do Duc Tuan - an officer of the Economic , Infrastructure and Urban Department in a ward in Hanoi said that his family has 2 state employees and 2 dependent children.
“My family’s current income is about 30 million VND, but the cost of living in Hanoi is quite expensive. To have a better life, my wife has to work as an accountant for several local businesses, so she has an additional income of about 8 million VND/month. Thus, the total income of the family is about 38 million VND, ensuring the living expenses of 4 people,” said Mr. Tuan.
According to Mr. Tuan, the current personal income tax deduction for taxpayers is 11 million and the dependent deduction is 4.4 million. With a family income of 38 million, minus 30.8 million VND for 2 main workers and 2 dependents, Mr. Tuan and his wife still have to pay personal income tax for the amount of 7.2 million VND according to regulations. Therefore, the Ministry of Finance has proposed two new personal income tax options that are beneficial to taxpayers and closer to reality.
Inadequacies in the way personal income tax is calculated are said to have created a burden for taxpayers. (Photo: Business Forum).
Accordingly, option 1 (traditional) is to increase the family deduction from 11 million to about 13.3 million VND, corresponding to a 20% increase according to CPI and dependents by 40%.
Option 2 (new), the Ministry of Finance increases the family deduction to 15.5 million VND/month for taxpayers based on the average GDP growth rate per capita and average income per capita. The payment level for dependents increases from 4.4 million VND to 6.2 million VND/month.
“Of the two options proposed by the Ministry of Finance, option 2 - increasing the deduction for taxpayers to 15.5 million VND/month (186 million VND/year); each dependent is deducted 6.2 million VND/month is considered more reasonable. However, such a family deduction has not yet resolved the current shortcomings and difficulties, especially in urban areas such as Hanoi and Ho Chi Minh City where prices of all goods are increasing.
Therefore, there should be a higher family deduction. I think that if the family deduction is raised to 17-18 million VND/month, it will be more suitable for current taxpayers," said Mr. Tuan.
Agreeing with the above view, Ms. Pham Thi Nham, Chief Accountant of a business in Trieu Khuc commune, Hanoi, said that her current income is 25 million VND/month, while her husband is an engineer at a construction company and his income is also 25 million VND/month.
However, her family has to support 3 dependents, including 2 children and a mother-in-law over 60 years old, but still has to pay personal income tax on the amount of more than 15 million VND. Therefore, the Ministry of Finance's proposal to increase the family deduction level is a reasonable step forward. However, this level still does not fully reflect the actual spending pressure of the people, especially for people in urban areas.
“The current deduction level is outdated. Actual costs for education, healthcare, housing, energy, etc. in urban areas have increased more rapidly than the CPI. The level of 13.3 - 15.5 million VND/month has not kept up with this increase. I propose that it can be raised to the initial level of 18 million VND/month. When taxes are reduced, people will increase their spending on shopping,” said Ms. Nham.
Should be divided and implemented immediately in 2025
According to Ms. Nham, the Ministry of Finance should study the zoning mechanism - for example, the deduction level in Ho Chi Minh City and Hanoi is higher than in the provinces - like the current regional minimum wage regulations. At the same time, it is necessary to loosen the conditions for proving dependents and add a deduction mechanism for expenses of high social significance such as general tuition fees and medical expenses outside of health insurance.
“If it increases to 18 million VND, with the current income of around 50 million VND/month for both my husband and I, with 2 children and an elderly mother as dependents, I will be entitled to a family deduction of 36 million VND/month plus 6.2 million VND/dependent, the total deduction is 54.6 million VND, then my family will not have to pay personal income tax. If the taxpayer is allowed to increase the amount to be paid to 18 million VND, workers like us can think about having more savings to stabilize our lives in the long term,” said Ms. Nham.
Commenting on this content, Mr. Nguyen Van Phung, former Director of the Department of Taxation for Large Enterprises, proposed to publicize the basis for proposing family deduction levels.
“Previously, we proposed from 4 million, to 9 million and then 11 million, all based on scientific and practical grounds from the survey of population income, expenditure survey... and also based on practical grounds and Article 19 of the Personal Income Tax Law.
Currently, we have to calculate specifically to come up with an appropriate family deduction level. If the CPI increases by 20%, we will increase the family deduction level by 20%, if the CPI increases by 25%, we will calculate a corresponding increase in the family deduction level," Mr. Phung commented.
According to the Ministry of Finance, the Ministry is expected to submit to the National Assembly Standing Committee a draft on personal income tax at the National Assembly session in October 2025 and will apply it in the 2026 tax period.
Dr. Nguyen Ngoc Tu - former Director of the General Department of Taxation, currently a lecturer at Hanoi University of Business and Technology said that the new rate should be applied immediately.
“I propose to apply it immediately in 2025 because the Resolution issued in October can be applied immediately, unlike the Law.
In addition, personal income tax in 2025 is only provisional, and final income tax is in the first quarter of 2026. Therefore, there is still plenty of time for us to apply the new personal income tax calculation method for 2025.
Early application will promptly encourage and motivate taxpayers, creating confidence in amending the personal income tax law," Mr. Tu suggested.
Source: https://vtcnews.vn/de-xuat-thue-giam-tru-gia-canh-moi-nguoi-dan-va-chuyen-gia-noi-gi-ar956423.html
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