The current family deduction is low.

Minister of Finance: Current family deduction level is low — Exemption and reduction of personal income tax helps people have more financial resources to buy goods and consume. Photo: Hai Nguyen

"The fact that the Personal Income Tax Law is included in the 2025 program is considered normal and on schedule," said Mr. Lam.

According to Mr. Tran Van Lam, he himself is "very impatient, needing to fix it as soon as possible when many tax policies are inadequate, including personal income tax", but looking back overall, "this is not feasible yet".

The Standing Member of the Finance and Budget Committee added that there are many amendments and improvements to tax laws, and they cannot all be completed in one year, so they need to be divided into smaller parts to have enough time to implement. Not to mention, each draft law must follow strict procedures and processes for law making.

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

During the time when the Personal Income Tax Law has not been amended, a representative of the Finance and Budget Committee said 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 speed up the progress and submit them to the National Assembly in 2024.

In response to the opinion of National Assembly delegates that the current Personal Income Tax Law is too outdated, in an interview with Lao Dong on the sidelines of the National Assembly, Minister of Finance Ho Duc Phoc said that there has been a proposal to the Government and the National Assembly to include it in the law amendment program.

According to Minister Ho Duc Phoc, the personal income tax deduction index in Vietnam compared to the basic salary is 2.4 times higher than the world average. In fact, the average tax threshold abroad is only calculated from 0.5 to 1 times the basic 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. Thus, the family deduction compared to the base salary is high," said Minister Ho Duc Phoc.

However, compared to the urban living standards of the people, Minister Ho Duc Phoc said that the current family deduction level is low. Therefore, he said that he has proposed to include in the law amendment program, the family deduction level will be increased.

Previously, at the discussion session of the National Assembly on November 2, National Assembly Delegate Tran Van Lam also expressed concern that regulations, such as the starting point for taxable income and family deductions, were not adjusted to reflect fluctuations in minimum wages, prices and inflation in the economy.

One of the most frequently mentioned shortcomings is the family deduction level. Currently, the family deduction level is 15.4 million VND (including personal deduction of 11 million VND and dependent deduction of 4.4 million VND) maintained since July 2020.

While most consumer goods and services have increased by about 20-30% since the COVID-19 pandemic, causing people's living costs to rise. There are even outdated regulations that have been slow to adjust for decades, such as the 7 tax brackets applied since 2007. "This is a major problem that needs to be changed," he said.

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