Personal income tax rates of 15% and 25% reduced to 10% and 20%: Who benefits?

(Dan Tri) - The Ministry of Finance has proposed to shorten the personal income tax (PIT) table from 7 to 5 levels, in which the tax rates of 15% and 25% are reduced to 10% and 20%. This move is aimed at reducing the tax burden for salaried workers.

The Ministry of Finance has just sent a document to the Prime Minister and Deputy Prime Minister Ho Duc Phoc, reporting on the reception and explanation of the review opinions as well as comments from National Assembly deputies on the draft Law on Personal Income Tax (amended).

Based on the synthesis of opinions, the Ministry of Finance has reviewed and adjusted the personal income tax table in the direction of reducing the number of levels from 7 to 5, while widening the gap between levels and adjusting the tax rates to ensure that all taxpayers receive a reduction compared to the current level.

The Ministry of Finance proposes to shorten the personal income tax table (Photo: Manh Quan).

Notably, two important tax rates have been adjusted: The 15% tax rate (tier 2) is reduced to 10%, and the 25% tax rate (tier 3) is reduced to 20%.

Specifically, the 5% tax rate is applied to taxable income up to 10 million VND/month, to reduce the burden on the common income group. Income from 10-30 million VND/month is applied at 10%; 30-60 million VND/month is subject to 20%. The 30% tax rate applies to income from 60-100 million VND/month, while the highest rate of 35% applies to income over 100 million VND/month.

Thus, the group of subjects directly benefiting from the reduction of personal income tax rate from 15% to 10% and from 25% to 20% are salaried workers with average to good income, belonging to tax brackets 2 and 3 in the new tax schedule.

Level 2 (taxable income 10-30 million VND/month): Tax rate reduced from 15% to 10%, helping the group of workers with the greatest tax burden to significantly reduce the amount of tax payable each month.

Level 3 (VND 30-60 million/month): Tax rate reduced from 25% to 20%, creating financial space for the group of workers with good income, often accounting for a large proportion in the office, finance, engineering, and technology sectors.

The Ministry of Finance analyzed that the ceiling tax rate of 35% is reasonable, similar to many countries in the ASEAN region; if it is reduced to 30%, it could lead to concerns about tax incentives for high-income groups.

In addition, the Ministry of Finance officially proposed to increase taxable revenue for business households to 500 million VND/year, instead of the previous level of 200 million VND/year.

According to the drafting unit, the above revenue threshold ensures similarity with income from salaries and wages of individuals. Business households and individuals will pay tax on the revenue above this threshold.

"According to data as of October, there are more than 2.54 million business households regularly paying taxes. If this revenue level is applied, it is expected that about 2.3 million business households will not have to pay taxes, accounting for about 90% of the total number of business households paying taxes," the Ministry of Finance reported.

Source: https://dantri.com.vn/kinh-doanh/thue-tncn-bac-15-25-giam-con-10-va-20-ai-huong-loi-20251130172737916.htm