Raising family deductions: Reducing tax burden, increasing consumption motivation

VTV.vn - The resolution to increase family deductions to 15.5 million VND from 2026 has been positively received by the people, creating a strong stimulus effect for the economy.

People "breathe a sigh of relief" when tax burden is reduced

"After hearing the news that the family deduction has increased to 15.5 million VND, I really felt relieved. For many years, the tax deducted each month has been a large amount for people working in the city, especially when the cost of raising children and education is increasingly expensive," said Nguyen Van Hoa, a technical worker in Hanoi . He calculated that if this policy takes effect from 2026, his family - with two young children - will save about more than 1 million VND/month, equivalent to a portion of their children's tuition fees.

Mr. Hoa's story is the common sentiment of many taxpayers today, especially the middle-income group in large cities. The National Assembly Standing Committee's official approval of the Resolution to raise the family deduction to 15.5 million VND/month (an increase of 40.9% compared to the old level of 11 million VND) is considered a humane, timely and practical decision.

According to the Ministry of Finance 's calculations, adjusting this deduction level will help about 2.18 million people - equivalent to nearly 50% of those in level 1 - to switch to not having to pay personal income tax. The policy of raising the personal income tax deduction level to 15.5 million VND/month from the 2026 tax period has received great consensus from the people, is considered a stimulus to stimulate consumption and contributes to ensuring tax fairness in the context of rising living costs. Workers will benefit directly in 2026 and make tax finalization around March-April 2027, when the total income of the year is fully determined.

The adjustment of the family deduction level will help about 2.18 million people – equivalent to nearly 50% of those in level 1 – to move to the category of not having to pay personal income tax.

The policy of increasing the personal income tax deduction to 15.5 million VND from 2026 has received great consensus from the people, considered a stimulus to stimulate consumption and ensure tax fairness in the context of rising living costs.

Deputy Minister of Finance Nguyen Duc Chi said that increasing family deductions will help millions of workers reduce their tax burden, thereby directly supporting their lives in a context where income increases more slowly than living expenses.

“This is not only a technical adjustment in tax, but also a social security message, demonstrating the State's sharing with the people,” Mr. Chi emphasized, affirming that this decision shows the legislative body's listening and timely action in the face of economic fluctuations and social life pressures.

Economists also acknowledge that this policy has a “double impact”: it reduces the burden on workers and stimulates aggregate social demand – an important factor in maintaining growth momentum. Dr. Nguyen Minh Phong, an economic expert, said that increasing and reducing family deductions may reduce budget revenue in the short term, but that money will return to the economy through household spending, especially in the field of consumer goods and essential services. “This is an indirect stimulus measure, supporting social security and creating momentum for domestic consumption,” he said.

From a policy perspective, Associate Professor Dr. Dinh Dung Sy, a Tax Law expert, said that the new deduction level is a “step in the right direction”, but it is necessary to continue researching to increase the deduction for dependents, because the cost of raising children and caring for the elderly in urban areas currently exceeds 6.2 million VND/month. “For the policy to be practical, we should consider a level of 7-7.5 million VND/month and attach it to an automatic adjustment mechanism according to the CPI,” he suggested. He also noted that applying a uniform deduction level nationwide could make a difference in fairness, because the cost of living varies greatly between regions.

From a business perspective, Mr. Tran Tien An, Director of a technology company in Hanoi, commented that this policy creates a positive mentality for employees, but in the long term, it is necessary to reform the progressive tax schedule. “Many people with average incomes have fallen into high tax brackets, reducing motivation to work. If we expand the tax brackets and reduce tax rates for low-income groups, the State will encourage formal labor, reduce revenue loss from the informal sector and increase competitiveness to attract talent,” he said.

The deduction for dependents also increased from 4.4 million to 6.2 million VND/month, to more accurately reflect actual living expenses.

Towards a fair and flexible tax system

The resolution on increasing family deductions is considered a step to "pave the way" for a comprehensive reform of the Personal Income Tax Law, which is expected to be submitted to the National Assembly in the near future. Experts say that the reform roadmap should focus on three important strategic directions. The first direction is to widen the tax threshold and reduce the number of tax brackets to match the current income level, avoiding the situation where average workers quickly fall into high tax brackets. The second direction is to build an automatic adjustment mechanism when the CPI fluctuates by more than 20%, to avoid delays like in the recent period and ensure the timeliness of tax policies. Finally, the third direction is to promote the application of digital technology in tax management, helping people to declare more conveniently and transparently and increase the efficiency of budget revenue and expenditure.

From a social perspective, reducing the tax burden not only directly supports workers but also strengthens confidence in fiscal policy, encouraging spending and investment. Mr. Nguyen Van Hoa added: “I find this policy very welcome. When the State shares with the people, people also have more motivation to work and contribute.”

Reducing the tax burden also helps strengthen people's confidence in fiscal policy.

The policy of increasing the family deduction to 15.5 million VND/month is not only a technical adjustment of the financial sector, but also a measure to stimulate consumption, ensure fairness and strengthen social trust. From the tax story, we can clearly see a big message: when the policy puts people at the center, all economic flows will become more sustainable./.

Source: https://vtv.vn/nang-muc-giam-tru-gia-canh-nhe-ganh-thue-tang-dong-luc-tieu-dung-100251018232040322.htm