Towards building a fair and humane tax policy

The draft Personal Income Tax will have a major impact on business households. In the photo: A diaper and milk business household in Trang Bom commune, Dong Nai province. Photo: Ngoc Lien

The draft Personal Income Tax will have a big impact on business households. In the photo: A diaper and milk business household in Trang Bom commune, Dong Nai province. Photo: Ngoc Lien

The above contents are included in the revised Personal Income Tax Law Project presented at the 10th Session of the 15th National Assembly, which was highly appreciated by National Assembly deputies for the efforts in building tax policies of specialized agencies, with proposals towards fairness, humanity, and in line with the trend of integration and development of the modern economy .

Highlights from the Draft Law on Personal Income Tax

According to information from group discussions at the 10th Session of the 15th National Assembly , the revised Personal Income Tax Law Project is being gradually supplemented and completed to be submitted to the National Assembly for approval, aiming to soon bring tax policies to the people by 2026.

Most recently, from the comments on the revised Personal Income Tax Law Project, the Ministry of Finance reported to the Government on the reception and explanation of the review opinions and opinions of National Assembly deputies on the revised Personal Income Tax Law Project. Accordingly, one of the important contents that attracted the attention of many people was the proposal to adjust the non-taxable revenue level of individuals from 200 million VND/year to 500 million VND/year. The level of 500 million VND/year is also the level that can be deducted before paying tax according to the rate on revenue. According to the assessment of the Ministry of Finance, when applying this revenue level, the whole country will have about 90% of business households not having to pay tax (about 2.3 million individuals and business households).

Along with the proposal to increase the non-taxable revenue level, another issue of great concern to the people is the proposal to increase the family deduction for taxpayers to 15.5 million VND/month. Specifically, the deduction for taxpayers will be increased from 11 million VND/month to 15.5 million VND/month; the deduction for each dependent will be adjusted from 4.4 million VND/month to 6.2 million VND/month. In his response to the opinions of National Assembly deputies, Minister of Finance Nguyen Van Thang emphasized: The family deduction for taxpayers and dependents is a specific level according to the general level of society, regardless of whether people have high or low incomes, different consumption needs, or are in different locations.

The progressive tax schedule applies to resident individuals with income from salaries and wages in the direction of reducing the number of tax rates from 7 to 5, with tax coefficients from 5-35% according to each prescribed level. However, many opinions say that some tax rates are still high, and at the same time hope that the National Assembly will consider and lower the tax payment regulations, ensuring harmony between the different levels. For example, if an employee has a revenue level at level 1, he only has to pay 5% tax, but an income of 11 million VND/month has to pay 15% tax at level 2 (an increase of 10%). Therefore, many opinions say that the tax coefficient gap should be increased from 5% to 10%, 15%...

Decisions that please the people

Personal income tax is one of the main sources of revenue for the state budget. In 2024, Dong Nai province collected over 6.7 trillion VND from personal income tax. This shows that the rate of personal income tax payers in the province is very large. Therefore, tax policies are always of interest.

Tax officers from the 10th Tax Department of Dong Nai Province guide traders at Dong Xoai market (Binh Phuoc ward) to pay taxes electronically. Photo: Truong Hien

Mr. Tran Van Son, senior manager of a foreign-invested company in Amata Industrial Park (in Long Binh ward), shared: Every year, he contributes nearly 100 million VND in personal income tax to the state budget. Therefore, he is interested in and closely follows the proposed adjustments in the Draft Law on Personal Income Tax at this National Assembly session. According to Mr. Son, raising the family deduction level and changing the tax rate are very appropriate and hopes that the National Assembly will soon pass them so that tax policies can come into effect, creating conditions for people to have more opportunities to accumulate capital and improve their lives.

Sharing the same view, Ms. Nguyen Thi Minh Y (grocery store owner in Tran Bien ward, Dong Nai province) said: The draft revised Law on Personal Income Tax has made changes in line with the wishes of taxpayers. In particular, the proposal to increase the non-taxable revenue for individuals and business households to 500 million VND/year is one of the popular decisions, helping millions of business households reduce the tax burden, while encouraging business households to make tax declarations to have a basis to prove to the tax authorities about their actual income.

The revised Law on Personal Income Tax is expected to take effect from January 1, 2026. According to economic experts, to fulfill personal income tax obligations, people need to proactively apply methods of registration and tax declaration in accordance with regulations. These include regulations on electronic invoices, electronic invoices generated from cash registers connected to tax authorities, etc.

According to economic experts, the Draft Law on Personal Income Tax has shown great progress in both thinking and content. The adjustments in the draft show that central ministries and branches have actively listened and taken note to overcome the shortcomings in current tax policies and regulations. These are also efforts to realize the major policies of the Party and State in supporting and promoting the development of the private economy, bringing the resolutions of the Politburo, the National Assembly, etc. into life.

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