Proposal to increase family deduction level and regular adjustment

Through many amendments and supplements to the Law on Personal Income Tax, the current deduction for taxpayers is 11 million VND/month (132 million VND/year); the deduction for each dependent is 4.4 million VND/month (from the 2020 tax period).

On October 17, the National Assembly Standing Committee passed a resolution on adjusting the personal income tax deduction level. Accordingly, the deduction level for the taxpayer himself/herself was adjusted from 11 million VND/month to 15.5 million VND/month and for each dependent from 4.4 million VND/month to 6.2 million VND/month.

The new family deduction level will be implemented when the Resolution takes effect, applied from the 2026 tax period, meaning tax settlement will not be made until 2027.

Sharing with VietNamNet reporter , Dr. Nguyen Ngoc Tu, lecturer at Hanoi University of Business and Technology, said that the family deduction of 15.5 million VND, although not yet meeting the expectations of taxpayers, is closer to reality than before.

According to Mr. Tu, previously, the adjustment of family deductions was mainly based on the consumer price index (CPI) and usually increased by only about 20%. This time, the Ministry of Finance has calculated additional factors such as GDP growth and per capita income, so the deduction has been adjusted to increase by about 40% compared to before.

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Experts say the family deduction of 15.5 million/month will become outdated by 2026. Photo: Nam Khanh

“The family deduction of VND15.5 million is relatively suitable for the 2025 tax period. However, in the context of the economy expected to grow strongly, possibly reaching over 10% in 2026, this level will become outdated and unreasonable if not further adjusted,” Mr. Tu commented.

According to the expert, the family deduction level needs to be adjusted more frequently to ensure it is consistent with the reality of socio-economic fluctuations.

“The Personal Income Tax Law should stipulate that the family deduction level must be adjusted every three years, or the authority should be given to the Government to make timely adjustments so that the deduction level does not remain stagnant, avoiding disadvantages for taxpayers,” Mr. Tu suggested.

Sharing the same view, Mr. Nguyen Ngoc Tinh, Vice President of the Ho Chi Minh City Tax Consultants and Agents Association, also said that the current family deduction of 15.5 million VND/month is outdated, especially when we have to wait until the 2026 tax period (ie, until 2027 to finalize taxes).

Meanwhile, living costs and inflation can fluctuate sharply. Therefore, Mr. Tinh proposed to increase the family deduction for taxpayers to 18 million VND/month.

Deductions for dependents are still low.

Regarding the expected deduction for dependents of 6.2 million VND, Dr. Nguyen Ngoc Tu said that this number is still low. Because this is a deduction applied to people that taxpayers are obliged to support, while the actual cost for dependents such as elderly parents or school-age children is currently very large.

"To ensure people's livelihood, the deduction for dependents should be increased to at least 50% of the deduction for individual taxpayers, which is about 8 million VND, which is reasonable," Mr. Tu stated his opinion.

According to Mr. Nguyen Ngoc Tinh, after the Personal Income Tax Law is amended and allows deductions for education and health expenses, the family deduction for dependents should also be increased. In the immediate future, he proposed raising it to 50% of taxpayers, equivalent to 9 million VND/month/person; then, progressing to equal the deduction level of taxpayers. At the same time, it should be applied immediately this year instead of waiting until 2026.

Because, according to Mr. Tinh, if the regulation is applied to the 2026 tax period, taxpayers will have to wait until March 2027 to make final settlement. While the deadline for tax settlement for 2025 is March-April 2026, there is every basis for early application to meet taxpayers' expectations.

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Source: https://vietnamnet.vn/tinh-thue-thu-nhap-ca-nhan-muc-giam-tru-gia-canh-den-nam-2026-se-lac-hau-2459823.html