Adjusted personal income tax:

The National Assembly Standing Committee has just passed a Resolution adjusting the personal income tax family deduction level, which is considered a deeply humane decision, demonstrating the State's sharing with workers in the context of escalating prices.

Many believe that the new policy not only helps reduce the tax burden but also fosters a spirit of cooperation and responsibility among citizens in fulfilling their obligations to the State budget.

Timely adjustments

To share the burden of workers amidst rising prices, the Trade Union has intensified the organization of "Trade Union Meals" with many preferential offers and support regarding food portions for workers. Photo: PV

According to a resolution recently passed by the National Assembly Standing Committee, the personal allowance for taxpayers has been increased from VND 11 million to VND 15.5 million per month, and from VND 4.4 million to VND 6.2 million per month for each dependent, effective from the 2026 tax year. This is the first adjustment after 5 years of applying the old rate, and is considered appropriate given the current fluctuations in prices and average income of the people.

According to calculations, a single person earning 17 million VND/month will not have to pay tax; if they have one dependent, the "tax-free" threshold is 24 million VND/month; and if they have two dependents, it is 31 million VND/month. This adjustment is expected to result in a budget shortfall of approximately 21,000 billion VND per year, but is considered a "publicly acceptable reduction in revenue," contributing to strengthening social confidence in tax policy.

Many "free" items were handed directly to workers in Hanoi by the Trade Union. Photo: PV

Compared to price trends in recent years, this increase essentially offsets the accumulated inflation and rising living costs, especially in large cities. According to many economic experts, the National Assembly Standing Committee's move is a correct step, demonstrating sensitivity to practical demands. With prices escalating, and the costs of education, healthcare, and housing all increasing, this adjustment is not only reasonable but also deeply humane.

Dr. Nguyen Van Binh, a public finance expert, stated: "The old personal allowance no longer accurately reflects the minimum cost of living for citizens. Increasing the allowance helps workers have more disposable income, thereby contributing to stimulating consumption and increasing demand in the economy."

In terms of policy signals, increasing the personal allowance demonstrates the State's support for wage earners – the group most significantly affected by price fluctuations. When tax policies are adjusted appropriately, people feel a sense of shared responsibility and fairness, thus becoming more willing to fulfill their tax obligations voluntarily.

The workers were delighted.

Upon receiving this good news, many workers expressed their excitement. Ms. Nguyen Thi Hoai, a worker at Quang Minh Industrial Park ( Hanoi ), shared that for many years, despite a personal allowance of 11 million VND/month for taxpayers and 4.4 million VND/month for each dependent, she was still required to pay personal income tax.

“Rent, living expenses, and children's tuition fees have all increased, while income hasn't risen significantly. When I heard that the government was adjusting the tax deduction, I felt really relieved because it shows understanding for the lives of workers,” said Ms. Nguyen Thi Hoai.

Ms. Nguyen Thi Ly, a worker at the Sai Dong B Industrial Zone (Hanoi), believes that the current tax deduction is outdated compared to reality, especially after the Covid-19 pandemic, when the income of many people was affected while the prices of goods and services increased. The new tax policy reflects a development philosophy that puts people at the center.

"When people have more disposable income, purchasing power will increase, thereby boosting production, business, and services. A humane policy always creates a positive ripple effect for the entire economy," said Ms. Nguyen Thi Ly.

Based on practical experience, Ms. Nguyen Thi Ly also suggested that the State should establish a mechanism to automatically adjust the personal allowance deduction according to the consumer price index (CPI) to ensure that the policy keeps pace with real-life situations.

"We shouldn't wait 5 or 7 years to make adjustments, because after just a few years, inflation can cause people's real incomes to plummet. Besides that, we also need to consider adjusting the progressive tax system so that middle-income earners aren't pushed up to higher tax brackets simply because of inflation," suggested Ms. Nguyen Thi Ly.

Not only has the National Assembly Standing Committee's resolution to increase the personal allowance received support from workers, but it has also garnered strong consensus from experts. While this policy may reduce revenue by approximately 21,000 billion VND per year compared to the current level, in the long term, it is a sound decision that contributes to boosting consumption, stabilizing society, and promoting sustainable growth.

According to the Ministry of Finance, increasing the personal allowance is not only a short-term solution to reduce the financial burden on citizens but also a step in the roadmap for reforming personal income tax. In the coming time, the agency will continue to review and amend the Personal Income Tax Law in the direction of simplifying procedures, expanding the scope of tax exemptions and reductions, and ensuring long-term stability.

Source: https://hanoimoi.vn/thue-thu-nhap-ca-nhan-dieu-chinh-kip-thoi-nhan-van-sat-thuc-te-doi-song-720229.html