Ministry of Finance proposes to increase family deduction to 15.5 million VND

The Ministry of Finance proposed to submit a plan to increase the family deduction for taxpayers to 15.5 million VND and for dependents to 6.2 million VND.

The content stated in the draft Resolution on adjusting the family deduction level of the National Assembly Standing Committee sent to the Ministry of Justice for appraisal. Accordingly, the Ministry of Finance proposed to submit a plan to increase the family deduction level for taxpayers from 11 million VND per month to 15.5 million VND and for dependents from 4.4 million VND to 6.2 million VND.

This family deduction is applied according to the growth rate of average income per capita. From 2020 to now, the growth rate of average GDP per capita is about 40-42%.

With this plan, according to the Ministry of Finance , people with salary and wage income of 15 million VND per month do not have to pay personal income tax after deducting social insurance, health insurance, and unemployment insurance. If the income is 20 million VND, the tax payable is about 120,000 VND per month after deducting insurance costs.

In case of having 1 dependent, an individual with income of 25 million VND will pay tax of 33,750 VND; and an income of 35 million VND, the tax rate is 265,000 VND. In case of allowances, subsidies, and voluntary pension insurance participation deducted before calculating tax, the tax payable will be lower, or none.

When this proposed reduction is applied, most taxpayers in Tier 1 will move to zero tax (accounting for 95% of current Tier 1 taxpayers). At the same time, a portion of individuals in Tier 2 will move to Tier 1 or zero tax. Similarly, those in the remaining tax brackets will all have their personal income tax payable reduced.

It is expected that the budget revenue from personal income tax will be about 84,477 billion VND, a decrease of 21,000 billion VND per year compared to the current level. The number of people still having to pay tax is 2.21 million people, a decrease of 2.18 million people (49.66%) due to the change from level 1 to non-taxable status.

Workers at Dony garment company (Vinh Loc A commune, Ho Chi Minh City), August 2025. Photo: Quynh Tran

Currently, the family deduction is 11 million VND and each dependent is 4.4 million VND per month. This level has been maintained since July 2020. Individuals are deducted from insurance, family deductions, allowances, subsidies... the remaining amount is the income subject to personal income tax. This level will be calculated and changed by the authorities when the CPI increases by more than 20%.

Previously, some localities suggested raising the family deduction level higher than the proposal of the Ministry of Finance. Specifically, the National Assembly delegation of Dien Bien province said that the appropriate level should be 20 million VND (equivalent to 240 million VND per year) for taxpayers and 10 million VND for dependents. This is to ensure fairness, nurture revenue sources, support people to overcome the pressure of increasing living costs, and expand the scope of voluntary tax declaration and payment.

The adjusted family deduction based on the increase in the CPI from 2021 to 2025 can reach 21.24%. However, according to the delegation of Ho Chi Minh City, Vietnam's CPI includes 752 items, such as essential items such as food, beverages, housing, education, transportation, and healthcare. But in reality, people's living expenses are often closely related to a few groups of goods that meet basic needs such as food, clothing, and housing... These items have increased sharply over the past 5 years, for example, the price of rice has increased by nearly 40%, pork by over 60%, and apartment buildings by over 50%.

Therefore, they proposed to adjust the family deduction for taxpayers to increase by 50%, to 16.5 million VND, and for dependents to 6.6 million VND per month.

The Draft Resolution of the National Assembly Standing Committee will be considered and, if approved, will apply to the 2026 tax period.

Source: https://baohatinh.vn/bo-tai-chinh-trinh-nang-giam-tru-gia-canh-len-155-trieu-dong-post295277.html