People are disappointed
At the regular press conference on the afternoon of March 29 held at the Ministry of Finance , Mr. Truong Ba Tuan - Deputy Director of the Department of Management and Supervision of Tax, Fee and Charge Policies shared that due to the CPI fluctuation of less than 20% as well as waiting for amendments to the Law on Personal Income Tax, the Ministry of Finance said that it has not yet proposed to adjust the family deduction level.
After this comment, public opinion was stirred and expressed disappointment.
Sharing with reporters, Mr. Pham Vu Minh (38 years old, Ha Dong, Hanoi ) shared that he was quite disappointed. After much information showed that the Ministry of Finance had admitted that the family deduction level was outdated and backward, but until now, just because the inflation rate "has not reached the correct level according to the Law, the Ministry of Finance has not changed it" - Mr. Minh said.
Previously, Mr. Minh shared with Lao Dong Newspaper the story of 17 years of working, for the first time, his income could not cover his expenses.
Faced with financial burdens, Mr. Minh hoped that the personal income tax policy would soon be amended to support the people. However, after the information at the press conference, Mr. Minh's hope turned to disappointment.
Like Mr. Minh, Mr. Hoang Quoc Anh (Hoang Mai, Hanoi) said that if the Ministry of Finance waits until 2025 to report, it means that the family deduction level will not be changed until 2026.
"I was disappointed when I heard the news. If we wait until 2025 to adjust, it will be outdated compared to 2025. This is similar to the story of changing the family deduction level in 2019" - Mr. Quoc Anh shared.
Talking about living standards, Mr. Pham Van Thanh ( Ha Nam ) said that his family spends 13-14 million VND per month.
"This is the standard of living for my wife and two young children in the countryside. I currently work in the construction industry at a private company in Hanoi. My income has decreased a lot since the COVID-19 pandemic, so I am currently renting a house in the city," said Mr. Thanh.
The husband rents a house in the city, spending on living expenses including food, electricity, water... while his wife in the countryside also has to spend on the above items plus tuition for two young children in primary and secondary school. Mr. Thanh estimates that the couple's monthly spending is up to 20 million VND.
"Even during peak wedding seasons like the beginning of this year, my wife and I spend 30-40 million VND/month, which is obvious," said Mr. Thanh, wondering why the Ministry of Finance decided not to reduce the family deduction.
Reasons why the Ministry of Finance has not adjusted the family deduction level
Speaking about the reason at the press conference, Mr. Truong Ba Tuan - Deputy Director of the Department of Tax, Fee and Charge Policy Management and Supervision - shared: The Law on Personal Income Tax (PIT) stipulates that if the consumer price index fluctuates by more than 20% compared to the time the law comes into effect or the time of the most recent adjustment of the family deduction level, the Government will submit to the National Assembly Standing Committee (NASC) to adjust the family deduction level.
Mr. Tuan said that since 2009, when the Personal Income Tax Law took effect, the Ministry of Finance has always proactively reviewed and advised the National Assembly and the National Assembly Standing Committee to adjust the family deduction level in accordance with reality.
"Through monitoring the consumer price index (CPI) from 2020 (the time of the most recent adjustment of the family deduction level) to now, this index has not fluctuated to 20%. Therefore, in the coming time, the Ministry of Finance will continue to monitor the development of the CPI index to proactively propose according to regulations" - Mr. Tuan said.
In addition, regarding the overall amendment of the Personal Income Tax Law, Mr. Tuan said that the Ministry of Finance was assigned by the Government to review all tax laws to report to the National Assembly for appropriate amendments.
"In 2024, the Ministry of Finance will focus on amending 3 tax laws (Corporate Income Tax Law, Value Added Tax Law, Special Consumption Tax Law). As for the Personal Income Tax Law, the amendment roadmap is 2025, following the roadmap that the Ministry of Finance has reported to the Government and the National Assembly Standing Committee.
According to Mr. Tuan, the overall revised contents include regulations on taxable income, tax-free income, tax structure, and issues related to family deduction levels.
Minister of Finance: Current family deduction level is low
At the press conference announcing the results of the 6th session on the morning of November 29, 2023, talking with Lao Dong on the sidelines of the National Assembly, Minister of Finance Ho Duc Phoc said that there had been a proposal to the Government and the National Assembly to include it in the law amendment program.
According to Minister Ho Duc Phoc, the personal income tax deduction index of Vietnam compared to the base salary is 2.4 times higher than the world average. In fact, the average tax threshold in foreign countries is only calculated from 0.5 to 1 times compared to the base salary.
"The current personal income tax deduction is 11 million VND/month for the taxpayer and 4.4 million VND/month for dependents, while the average salary is 4.6 million VND. Thus, the family deduction compared to the base salary is high," said Minister Ho Duc Phoc.
However, compared to the urban living standards of the people, Minister Ho Duc Phoc said that the current family deduction level is low. Therefore, he said that he has proposed to include it in the law amendment program, which will increase the family deduction level.
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