Approval of Resolution on adjusting family deduction level of personal income tax

Vice Chairman of the National Assembly Nguyen Duc Hai chaired the meeting.

Increase personal income tax family deduction to 15.5 million VND/month

Presenting the Government's Report, Deputy Minister of Finance Nguyen Duc Chi said that Clause 4, Article 1 of the 2012 Law on Personal Income Tax stipulates: In case the consumer price index (CPI) fluctuates by more than 20% compared to the time the Law takes effect or the time of the most recent adjustment of the family deduction level, the Government shall submit to the National Assembly Standing Committee an adjustment of the family deduction level prescribed in this Clause in accordance with price fluctuations to apply to the next tax period.

According to calculations, by the end of 2025, the consumer price index (CPI) has fluctuated by more than 20% compared to the time of the most recent adjustment of the family deduction level (2020) at 21.24% (according to the Data Table in Appendix 1 attached), thus ensuring the legal basis for adjusting the family deduction level.

According to the Government's Proposal, the adjustment of family deduction levels needs to be consistent with price fluctuations. In addition to the CPI index which reflects the general price fluctuations, there are other factors that also affect prices such as average income per capita, average GDP, average spending per capita in a certain period...

The Government proposed two options to adjust the family deduction level. The first option is to increase the deduction for the taxpayer from 11 million VND/month to about 13.3 million VND/month (an increase of about 21.24% compared to the current level). The deduction level for each dependent increases from 4.4 million VND/month to 5.3 million VND/month (an increase of about 21.24% compared to the current level).

The second option is that the deduction for the taxpayer himself will increase from 11 million VND/month to about 15.5 million VND/month (an increase of about 40.9% compared to the current level). The deduction for each dependent will increase from 4.4 million VND/month to about 6.2 million VND/month (an increase of about 40.9% compared to the current level).

Through synthesizing comments, the Government has presented in the draft Resolution submitted to the National Assembly Standing Committee for consideration and approval according to the second option.

With this option, an individual taxpayer (if there are no dependents) with an income of 17 million VND/month, after deducting insurance and personal deductions, the income of 17 million VND/month will still not be subject to tax. The income exceeding 17,285 million VND/month will be subject to tax at a tax rate starting at 5%.

In the case of an individual taxpayer with 1 dependent, after calculating insurance, family deductions for the taxpayer and deductions for 1 dependent, the income exceeding 24.22 million VND/month will be subject to tax, with a tax rate starting from 5%. Similarly, in the case of an individual taxpayer with 2 dependents, the income exceeding 31.155 million VND/month will be subject to tax, with a tax rate starting from 5%.

Consider balancing the state budget in the last months of 2025

Briefly presenting the Report on the review of the draft Resolution, Chairman of the Economic and Financial Committee Phan Van Mai said that the Standing Committee of the Committee agreed on the necessity of adjusting the family deduction level of personal income tax for taxpayers and dependents to suit the socio-economic situation and price fluctuations, contributing to reasonable and fair mobilization of income, creating motivation for taxpayers to accumulate and consume, contributing to promoting economic growth.

Chairman of the Economic and Financial Committee Phan Van Mai presented a summary of the Report on the review of the draft Resolution.

Regarding the family deduction level for taxpayers, the majority of opinions in the Standing Committee of the Economic and Financial Committee agreed with the direction of increasing the family deduction level according to the criteria of average income growth rate per capita and average GDP growth rate per capita and basically agreed with the family deduction level proposed by the Government.

However, some opinions said that the proposed family deduction level may be appropriate at the present time, but because it is only calculated based on the growth rate of the indicators in 2025 compared to 2020, it does not meet the reality; therefore, it is recommended that the Government consider to have the necessary space, accordingly, it can consider the option of calculating the increase rate according to the growth rate of income or GDP per capita estimated to be implemented in 2025 or expected in 2026 and the following years compared to the implementation in 2020. Some opinions suggested to stipulate a higher family deduction level than the Government's proposed plan.

Deputy Minister of Finance Nguyen Duc Chi presents the Government's Proposal

Members of the National Assembly Standing Committee agreed that it is necessary to issue a resolution adjusting the family deduction level on personal income tax for taxpayers and dependents to suit the socio-economic situation and price fluctuations.

At the same time, members of the National Assembly Standing Committee also proposed that it is necessary to consider the budget balance situation in the last months of 2025 due to the impact of natural disasters and floods.

Concluding the discussion, Vice Chairman of the National Assembly Nguyen Duc Hai said that after consideration, the National Assembly Standing Committee agreed to adjust the personal income tax deduction for taxpayers and dependents according to the second option proposed by the Government. The new family deduction will be adjusted for the tax period in 2026, and finalized in the first quarter of 2027.

The Vice Chairman of the National Assembly also requested the Government to study the opinions of the National Assembly Standing Committee at this session to consider including appropriate and necessary contents on family deduction levels and tax calculation periods in the draft Law on Personal Income Tax (amended) to be submitted to the National Assembly at the 10th Session.

At the meeting, 100% of the members of the National Assembly Standing Committee present agreed to pass the Resolution of the National Assembly Standing Committee on adjusting the family deduction level of personal income tax.

Source: https://daibieunhandan.vn/thong-qua-nghi-quyet-ve-dieu-chinh-muc-giam-tru-gia-canh-cua-thue-thu-nhap-ca-nhan-10390730.html