Calculating personal income tax: Ministry of Finance proposes to increase family deduction to 15.5 million/month
Although there is a proposal to adjust the family deduction for taxpayers to 20 million VND/month, the Ministry of Finance has proposed to raise it to 15.5 million VND/month when calculating personal income tax.
The Ministry of Justice has just announced documents assessing the draft Resolution of the National Assembly Standing Committee (NASC) on adjusting the family deduction level of personal income tax.
According to the draft, the Ministry of Finance proposed two options for adjusting the family deduction level to submit to competent authorities for consideration and decision.
Option 1:Adjust the family deduction level according to the CPI growth rate as prescribed. Accordingly, the family deduction level for the taxpayer himself/herself increases from 11 million VND/month to about 13.3 million VND/month; the deduction level for dependents increases from 4.4 million VND/month to 5.3 million VND/month.
Option 2:Adjust the family deduction level according to the growth rate of per capita income and per capita GDP. The family deduction level for the taxpayer himself can be adjusted from 11 million VND/month to about 15.5 million VND/month and the deduction level for each dependent person from 4.4 million VND/month to 6.2 million VND/month.
Through synthesizing opinions, the Ministry of Finance submitted to the Government a report to the Standing Committee of the National Assembly to adjust the family deduction level according to option 2.
With option 2, the Ministry of Finance calculates that people with income from salaries and wages 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 from 20 million VND, the tax payable is about 120,000 VND/month after deducting insurance costs.
In case of having 1 dependent, an individual with income of 25 million VND/month will pay tax of 33,750 VND; and with income of 30 million VND/month, the personal income tax rate is 265,000 VND.
In case there are allowances, subsidies, and voluntary pension insurance participation deducted before calculating tax, the amount of tax payable is lower, or does not have to be paid.
However, there are still suggestions to raise the family deduction level higher than proposed in the draft.
Specifically, the National Assembly Delegation of Dien Bien Province proposed that the Ministry of Finance increase the family deduction to VND20 million/month for taxpayers (VND240 million/year) and VND10 million/month for each dependent. This proposal aims to ensure stability, consistent with the CPI growth rate in 2025 and the period 2026-2030.
Meanwhile, the Ho Chi Minh City National Assembly Delegation said that, based on the analysis data and recent price fluctuations, it is predicted that the increase in the price index of basic goods by the end of 2025 could reach 50% compared to the current level. Therefore, it is recommended to adjust the family deduction for taxpayers to increase by 50%, to 16.5 million VND/month.
At the same time, with the increase in family deductions, when building the Personal Income Tax Law (amended), it is also necessary to change the tax rates in the progressive tax table so that the income of the tax rate with the highest tax rate also increases by 50%, reaching 120 million VND/month.
Along with that, it is proposed to increase the income control level to determine dependents to 2.5 million VND/month and adjust the family deduction level for dependents to 6.6 million VND/month.
The Draft Resolution of the Standing Committee of the National Assembly will be considered and, if approved, will apply to the 2026 tax period.
