Since its promulgation in 2007, the Law on Personal Income Tax has been reviewed, amended and supplemented in 2012 and 2014.

The Ministry of Finance assessed that, in more than 18 years of implementation, the Law on Personal Income Tax has made an important contribution to regulating the income of all classes of people; encouraging transparency in personal income sources in production and business activities, and legitimate enrichment.

The management and collection of personal income tax have improved a lot, thereby creating favorable conditions and raising people's awareness and responsibility for fulfilling their tax obligations.

According to the Ministry of Finance, the scale of state budget revenue from personal income tax is increasingly expanding, contributing significantly to restructuring state budget revenue in a sustainable direction.

Data reported by the Ministry of Finance shows that in the period 2011-2024, personal income tax collection is continuously higher year after year (except for 2023). Notably, tax collection in 2024 is nearly 5 times higher than in 2011.

The proportion of revenue from personal income tax in total state budget revenue has increased from 5.33% in 2011 to more than 9% in 2024. Personal income tax has become the third largest source of revenue for the state budget in the tax system, after value added tax and corporate income tax.

In the recent period, revenue from personal income tax together with other state budget revenue sources has formed an important state budget fund, ensuring resource balance for implementing the country's socio -economic development goals and tasks.

In 2024, total state budget revenue will exceed VND2 million billion for the first time. Of which, personal income tax is VND186,300 billion, accounting for 9.12% of total state budget revenue. This figure has increased sharply compared to 2023 when it collected only over VND147,000 billion. Compared to 2011, personal income tax revenue was only VND38,469 billion, then in 2024 it will be nearly 5 times higher.

In the period 2011-2024, the proportion of revenue from personal income tax in total state budget revenue is respectively: 5.33%; 6.12%; 5.62%; 5.45%; 5.57%; 5.77%; 6.09%; 6.59%; 7.04%; 7.62%; 8.02%; 8.98%; 9.08% and 9.12%.

The Ministry of Finance assesses that after a period of implementation, some provisions of the current Law on Personal Income Tax have revealed some shortcomings, which are no longer suitable to the current domestic and international economic situation. These are issues related to taxable income, tax-free income, tax base and method of determining tax payable; progressive tax schedule.

The income regulation level of some types of income also needs to be adjusted to suit international tax trends and in relation to different sources of income of individuals.

Through review, the draft law is expected to amend and supplement 30 out of 35 articles of the current Law on Personal Income Tax.

Notably, regarding the family deduction level, from January 1, 2020 to present, the family deduction level for taxpayers is 11 million VND/month (132 million VND/year) and the deduction level for each dependent is 4.4 million VND/month, which has received many suggestions for prompt adjustment.

Accordingly, the Ministry of Finance has proposed two options to adjust the family deduction level. In which, the highest option adjusts the family deduction level for the taxpayer himself to 15.5 million VND/month (186 million VND/year) and the deduction level for each dependent to 6.2 million VND/month.

This plan has been approved by the National Assembly Standing Committee in Resolution No. 110/2025 on adjusting the family deduction level of personal income tax. This Resolution takes effect from January 1, 2026 and applies from the 2026 tax period.

According to the Ministry of Finance's calculations, the above adjustment of the family deduction level will reduce the state budget revenue by 21,000 billion VND. However, the reduction in revenue can be partially offset by the increase in revenue from other consumption taxes due to the increase in taxpayers' disposable income.

The family deduction of 15.5 million/month by 2026 will be outdated and needs to be applied immediately . The family deduction of 15.5 million/month is relatively suitable for the 2025 tax period, but if not applied immediately, it will soon become outdated.

Source: https://vietnamnet.vn/thue-thu-nhap-ca-nhan-lien-tuc-tang-thu-hon-mot-thap-ky-qua-2461370.html