The current personal allowance is low.

Minister of Finance: The current personal allowance is too low. — Tax exemptions and reductions on personal income tax help people have more financial resources to buy goods and consume. Photo: Hai Nguyen

"The inclusion of the Personal Income Tax Law in the 2025 review program is normal and on track," Mr. Lam said.

According to Mr. Tran Van Lam, he himself is "very anxious and needs to make corrections as soon as possible because many tax policies are inadequate, including personal income tax," but considering the overall picture, "this is not feasible at present."

The Standing Member of the Finance and Budget Committee further shared that the amendments and improvements to tax laws are numerous and cannot be completed in one year, so they need to be broken down into smaller parts to allow sufficient time for implementation. Not to mention, each draft law must adhere to strict legislative procedures and processes.

National Assembly representative Tran Van Lam. Photo: National Assembly Office.

While awaiting amendments to the Personal Income Tax Law, a representative from the Finance and Budget Committee stated that many other tax policies, such as value-added tax, special consumption tax, and corporate income tax, have been approved by the National Assembly Standing Committee for the Government to expedite their implementation and submit to the National Assembly in 2024.

Responding to comments from National Assembly deputies that the current Personal Income Tax Law is outdated, Minister of Finance Ho Duc Phoc told Lao Dong newspaper on the sidelines of the National Assembly that a proposal has been submitted to the Government and the National Assembly to include it in the legislative agenda.

According to Minister Ho Duc Phoc, Vietnam's personal income tax deduction ratio compared to the base salary is 2.4 times higher than the world average. In fact, the average tax threshold abroad is only 0.5-1 times the base salary.

"The current personal income tax deduction is 11 million VND/month for the taxpayer and 4.4 million VND/month for dependents, while the average salary is 4.6 million VND. Therefore, the personal deduction is high compared to the base salary," Minister Ho Duc Phoc stated.

However, compared to the urban living standards of the people, Minister Ho Duc Phoc believes that the current personal allowance is low. Therefore, he said he has proposed including an amendment to the law to increase the personal allowance.

Earlier, during the National Assembly session on November 2nd, National Assembly representative Tran Van Lam also expressed concern that regulations, such as the taxable income threshold and personal deduction levels, were not adjusted to reflect fluctuations in the minimum wage, prices, and inflation in the economy.

One of the most frequently mentioned shortcomings is the personal allowance. Currently, the personal allowance is 15.4 million VND (including a personal allowance of 11 million VND and a dependent allowance of 4.4 million VND), which has been in place since July 2020.

While most consumer goods and services have increased in price by about 20-30% since the COVID-19 pandemic, driving up people's living costs, some regulations are outdated and have been slow to be adjusted for decades, such as the seven tax brackets applied since 2007. "This is a major shortcoming that needs to be changed," he said.

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