Investing in gifted classes for their children also costs parents a lot of money.

No longer relevant

According to Resolution No. 954/2020/UBTVQH14 of the National Assembly Standing Committee on adjusting the family deduction level of Personal Income Tax, from July 1, 2020, the deduction level for taxpayers is 11 million VND/month, equivalent to 132 million VND/year and the deduction level for each dependent is 4.4 million VND/month. To date, this taxable income level and deduction level are still being applied.

According to this resolution, people with income from salaries and wages at the level of 15 million VND/month if having 1 dependent or 19 million VND/month if having 2 dependents do not have to pay personal income tax. However, in the context of rapidly increasing prices and increasingly high living standards, maintaining this taxable income level and family deduction is no longer appropriate.

Ms. Nguyen Thi Lieu, Thuan Hoa ward, said that market prices are increasing, especially regular expenses such as living expenses, education , health care... For example, the current educational needs require parents to invest a lot in their children. "I have two daughters studying at primary and secondary schools in the area. Just the need for advanced study and gifted classes, the cost of books and clothes each child spends more than 5 million VND per month, not to mention the cost of food and other expenses. Just a rough calculation, the deduction for a dependent is completely no longer appropriate," Ms. Lieu said.

Not to mention if a family has young children and has to hire a babysitter, or if a family has children in high school or university, the cost will be much higher. With a taxable income of 11 million VND per person plus the current pressure on prices and spending, people have to "tighten their belts" to ensure their lives, not to mention saving or preparing for related risks, Ms. Lieu emphasized.

Raise tax threshold to 15.5 million VND/month

Faced with the above shortcomings, recently, the draft Resolution of the National Assembly Standing Committee on adjusting the family deduction level of personal income tax, proposing to raise the taxable income for taxpayers from 11 million VND/month to 15.5 million VND/month; family deduction for each dependent from 4.4 million VND/month to 6.2 million VND/month, is attracting much attention and is considered appropriate.

Mr. Tran Minh Duc, Director of Hong Duc Center for Training and Consulting on Finance, Accounting and Tax, said that the Ministry of Finance's proposal to raise the taxable income for taxpayers from 11 million VND/month to 15.5 million VND/month and family deduction for each dependent from 4.4 million VND/month to 6.2 million VND/month is a reasonable adjustment, in line with the current economic context and living standards. In fact, people's living expenses are increasing, especially health care, housing, childcare, etc. Adjusting the taxable income and family deduction will help reduce financial burdens, creating conditions for taxpayers to stabilize their lives. In addition, a number of other social policies such as exemption/reduction of general education tuition fees are also being implemented, so this adjustment is even more meaningful in synchronizing policies and directly supporting workers.

With this new taxable income and family deduction, most taxpayers at level 1 will no longer have to pay tax. Some taxpayers at level 2 will move to non-tax status or down to level 1. Similarly, individuals at the remaining tax levels will have their personal income tax payable reduced. According to the Ministry of Finance's assessment, the adjustment to increase taxable income and family deduction for taxpayers will help reduce difficulties for taxpayers.

This deduction level is considered “timely”. However, many people still believe that adjusting the taxable income level and family deduction of personal income tax needs to be calculated more carefully in the long term, at least forecasting people’s income and life in the next 5 years to avoid being outdated. At the same time, carefully calculating the taxable income level needs to create “gaps” so that people can accumulate to serve investment needs. This both meets long-term growth targets and contributes to improving people’s lives and promoting economic development.

According to experts, raising the taxable income level and family deductions will certainly affect the budget revenue in the short term. Therefore, the State needs to synchronously calculate between reducing the burden on taxpayers and balancing the budget revenue, while strengthening solutions to prevent revenue loss to ensure sustainability.

Article and photos: Hoang Anh

Source: https://huengaynay.vn/kinh-te/som-dieu-chinh-muc-giam-tru-gia-canh-157954.html