The Standing Committee of the National Assembly passed a Resolution adjusting the personal allowance deduction.

On the morning of October 17th, continuing the 50th session, the Standing Committee of the National Assembly discussed and approved a Resolution on adjusting the personal income tax deduction for dependents, applicable from the tax year 2026, with the tax settlement date being in the first quarter of 2027. Deputy Chairman of the National Assembly Nguyen Duc Hai chaired the discussion session.

On behalf of the Government, Deputy Minister of Finance Nguyen Duc Chi presented the draft Resolution of the National Assembly Standing Committee on adjusting the personal income tax deduction for dependents, stating that adjusting the deduction is considered necessary to suit the socio-economic situation and price fluctuations, in order to reasonably and fairly encourage income collection and create incentives for taxpayers to accumulate and consume, contributing to promoting economic growth.

The government has submitted two options to the National Assembly Standing Committee for adjusting the personal allowance deduction.

Option 1 involves adjusting the personal allowance deduction according to the CPI increase rate. According to Deputy Minister of Finance Nguyen Duc Chi, data from the General Statistics Office indicates that the cumulative CPI is projected to fluctuate by 21.24% between 2020 and 2025. Therefore, adjustments could be considered to correspond with the CPI increase. Specifically, the deduction for the taxpayer themselves would increase from 11 million VND/month to approximately 13.3 million VND/month (an increase of about 21.24% compared to the current level); the deduction for each dependent would increase from 4.4 million VND/month to 5.3 million VND/month (an increase of about 21.24% compared to the current level).

Implementing this plan is expected to reduce the state budget by approximately 12,000 billion VND per year compared to the current revenue levels and number of taxpayers as stipulated by regulations.

Under Option 2, the personal allowance is adjusted according to the growth rate of average per capita income and the growth rate of average per capita GDP.

According to the General Statistics Office, the fluctuation in per capita income and per capita GDP from 2020 to the present is approximately 40-42%. Therefore, based on the growth rate of per capita income and per capita GDP in 2025 compared to 2020 as mentioned above, the personal allowance deduction can be adjusted as follows:

The personal tax deduction will increase from VND 11 million/month to approximately VND 15.5 million/month (an increase of about 40.9% compared to the current level); the deduction for each dependent will increase from VND 4.4 million/month to approximately VND 6.2 million/month (an increase of about 40.9% compared to the current level).

According to Deputy Minister Nguyen Duc Chi, under this plan, an individual taxpayer (without dependents) with an income of 17 million VND/month would have 10.5% deducted for insurance contributions (8% social insurance + 1.5% health insurance + 1% unemployment insurance), resulting in 1.785 million VND (17 million VND x 10.5%) + 15.5 million VND (personal deduction for the taxpayer) = 17.285 million VND. Therefore, with an income of 17 million VND/month, this person would not have to pay tax. Only the income exceeding 17.285 million VND/month would be subject to tax, starting at a rate of 5%.

According to Deputy Minister Nguyen Duc Chi, implementing this plan is expected to reduce the state budget by approximately 21,000 billion VND per year compared to the current revenue levels and number of taxpayers as stipulated in the regulations.

In summary, Deputy Minister Nguyen Duc Chi stated that the majority of opinions agreed with Option 2, based on the criteria of the growth rate of average per capita income and the growth rate of average per capita GDP, with an increase of approximately 40% to 42% from 2020 to the present.

The government proposes that this Resolution take effect from the date of signing and apply from the 2026 tax year.

In a summary report reviewing the Government's submission, Phan Van Mai, Chairman of the National Assembly's Economic and Finance Committee, stated that the Standing Committee agreed on the necessity of adjusting the personal income tax deduction for taxpayers and their dependents to align with the socio-economic situation and price fluctuations. This would contribute to a reasonable and fair collection of income, create incentives for taxpayers to accumulate and consume, and ultimately promote economic growth.

However, Mr. Phan Van Mai stated that the Government had submitted Document No. 844/TTr-CP dated September 29, 2025, on the draft Law on Personal Income Tax (amended), which includes a proposal to amend and supplement regulations on the personal allowance for taxpayers and dependents. The Standing Committee of the National Assembly met and commented on the draft Law on Personal Income Tax (amended) and concluded that it is necessary to combine the draft Law on Personal Income Tax (amended) and the draft Resolution on adjusting the personal allowance to address the issue simultaneously and specify in the Law the personal allowance for taxpayers and dependents, granting the Government the authority to submit to the Standing Committee of the National Assembly for consideration and adjustment of the personal allowance in necessary cases (similar to the provisions of the current Law on Personal Income Tax).

Therefore, from the perspective of timing, the Standing Committee of the Economic and Financial Committee believes that the issuance of a separate Resolution by the National Assembly Standing Committee to adjust the personal allowance at this time – simultaneously with the National Assembly Standing Committee and the National Assembly considering the draft Law on Personal Income Tax (amended) to comprehensively amend the Law and expected to pass it at the 10th Session – is not really appropriate and creates unnecessary complexity for taxpayers in implementation.

Regarding the adjustment of the personal income tax deduction for dependents, Phan Van Mai, Chairman of the National Assembly's Economic and Finance Committee, stated that the majority of opinions within the Standing Committee agreed with the direction of increasing the deduction based on the average per capita income growth rate and the average per capita GDP growth rate (Option 2), and basically agreed with the deduction level proposed by the Government.

Following discussions among members of the National Assembly Standing Committee, the opinions of the State Audit Office, and explanations from government representatives, in his concluding remarks at the discussion session, National Assembly Vice Chairman Nguyen Duc Hai stated that the members of the National Assembly Standing Committee unanimously agreed with the contents proposed in the Government's submission.

The Standing Committee of the National Assembly will issue a resolution on the duration and amount of personal income tax deductions for dependents, as proposed by the Government. The Standing Committee also requested the Government to study the opinions raised at this session, such as considering necessary and appropriate content regarding the deduction amount, tax period, and application, in order to facilitate the amendment of the Personal Income Tax Law.

The Standing Committee of the National Assembly voted to approve a Resolution on adjusting the personal income tax deduction for dependents. Also at the session, the Standing Committee of the National Assembly approved a Resolution on the environmental protection tax rate for gasoline, diesel, and lubricants in 2026.