Ministry of Finance studies and proposes to the Government to adjust family deduction levels

Amending family deduction levels to ease people's difficulties

In the resolution of the regular Government meeting in January that was just issued, the Government and the Prime Minister assigned the Ministry of Finance to preside over and coordinate with agencies and localities to synchronously and effectively implement solutions on taxes, fees and charges issued by competent authorities.

At the same time, propose and report to competent authorities the policies on exemption, reduction and extension that need to be applied in the coming time.

In particular, the Government requested the Ministry of Finance to study and propose to the Government to adjust the family deduction level in calculating personal income tax to support and remove difficulties in people's lives.

The Government assessed that in January, the world situation continued to develop complicatedly; strategic competition between major countries was fierce, conflicts in Ukraine and the Gaza Strip persisted; conflicts in the Red Sea escalated.

In the country, opportunities, advantages and difficulties, challenges are intertwined, but difficulties, challenges are more numerous.

In that context, under the consistent, timely and practical leadership of the Party Central Committee, the participation of the entire political system, the consensus and active participation of the people and the business community, the socio-economic situation in January continued its positive recovery trend.

The consumer price index increased by 3.37% over the same period last year. The monetary market and exchange rates were stable; lending interest rates continued to decrease. Social security was guaranteed; people's lives continued to improve.

However, production and business activities in some sectors and fields are still difficult. The lives of a part of the population are still difficult, especially in remote areas, ethnic minority areas, border areas and islands.

Family deductions are outdated.

Dr. Nguyen Ngoc Tu - senior tax expert said that the family deduction for calculating personal income tax is outdated compared to the reality of life, income, socio-economic development, price fluctuations...

While waiting for a comprehensive revision of the Personal Income Tax Law, raising the family deduction level is needed promptly to partly ensure the rights of taxpayers.

The family deduction for taxpayers should be increased to 20 million VND/month, and for dependents it should be 9-10 million VND/month.

Mr. Tu also said that this solution achieves a dual goal. It not only ensures rights and supports taxpayers to reduce difficulties but also stimulates consumption and helps businesses restore production and business when they sell more goods and services.

Previously, member of the Standing Committee of the Finance and Budget Committee Tran Van Lam also proposed that it is necessary to promptly amend the family deduction level to suit actual fluctuations.

Previously, in the resolution of the 5th session of the 15th National Assembly issued in July 2023, the National Assembly also requested the Government to study the plan to increase the family deduction level for personal income tax.

According to the General Department of Taxation, in the context of many economic challenges in 2023, personal income tax revenue reached VND 155,421 billion, accounting for 10.6% of total domestic revenue.

Of which, personal income tax from salaries and wages is VND 108,228 billion, reaching 108.7% compared to 2022; accounting for about 70% of the total revenue of this tax.