Proposal to increase family deduction to maximum 18 million VND per month

Currently, the family deduction for individual taxpayers is 11 million VND and the deduction for each dependent is 4.4 million VND, maintained from July 2020. Individuals are deducted for insurance, family deductions, allowances, subsidies..., the remaining amount is the income used to calculate personal income tax. However, this deduction is considered inappropriate in calculating personal income tax, when spending and living are increasingly expensive.

Commenting on the proposal to develop the draft Law on Personal Income Tax (replacement), Ha Tinh province proposed to increase the family deduction for taxpayers with income from wages and salaries to 18 million VND per month, and for dependents to 8 million VND per month.

The deduction for taxpayers applied since 2013 is 9 million VND per month, and for dependents is 3.6 million VND. At that time, according to Ha Tinh province, the basic salary was 1.15 million VND, but now it has increased 2.03 times, to 2.34 million VND, while the new deduction has increased by 22.2%, from 9 to 11 million VND. Therefore, it is necessary to increase it to match the increase in the basic salary.

Similarly, another ministry and locality also proposed to increase the family deduction level but at a lower level. For example, the Ministry of National Defense proposed to increase it to VND17.3 million for taxpayers and VND6.9 million for dependents. The ministry explained that in 2020 - the time the current deduction level was issued - the basic salary was VND1.49 million per month. After 5 years, the family deduction remained the same while the basic salary was VND2.34 million, an increase of more than 57%.

Son La province proposed to increase to 16 million VND for taxpayers and 5 million VND for dependents. Ninh Thuan province proposed to increase to 14 million VND and 6 million VND respectively.

Many localities and ministries have proposed adding deductions to support costs for education, healthcare, housing, voluntary social insurance, and investments in human development. It is also proposed to include deductions to support special cases such as employees who are single parents or have relatives with serious illnesses.

Bac Giang province also believes that the application of the deduction level must be suitable to the actual living conditions of each region and area in the country instead of applying a single level as it is currently. Sharing the same view, the Ministry of Information and Communications proposed to develop a deduction level suitable to the Government's minimum wage policy according to 4 regions.

In addition, many opinions also suggested that the Ministry of Finance amend the progressive tax schedule. According to Ninh Thuan province, this tax schedule needs to be designed with a reasonable gradual increase, avoiding the burden on people with average incomes, ensuring that people with high incomes contribute fairly. "The tax schedule needs to add more intermediate ranges, different deductions between tax rates to create rationality, avoiding the phenomenon of unfair jumps in rates," the province proposed.

The Ministry of Home Affairs requested that the drafting agency fully assess the socio-economic impact of family deduction policies and deductions for charitable and humanitarian contributions.

In response, the Ministry of Finance said that the draft law on personal income tax has taken into account research to increase the family deduction for taxpayers and dependents. This is to be consistent with the developments of the consumer price index and the macro economy in recent years, contributing to reducing the burden on taxpayers.

At the same time, the operator also proposed to add other specific deductions such as medical and educational expenses. They also said that Vietnam could study to reduce the current 7 levels to a suitable level. Along with that, the management agency could consider widening the income gap within the levels. This is to ensure regulation for those with income at high tax levels, creating convenience in tax declaration and payment.

However, according to the drafting agency, this is only the stage of drafting the outline, so it only focuses on clarifying the problems and shortcomings that need to be revised and supplemented. They will study and propose detailed content and specific assessments when the law is included in the law and ordinance-making program of the National Assembly.

The draft Law on Personal Income Tax (amended) will be registered in the law and ordinance making program for 2025 and is expected to be submitted to the National Assembly for comments in October 2025 and approved in May 2026.