Ministry of Finance maintains the income threshold regulation of 3 million VND
In the summary of comments on the draft Circular guiding the Law on Personal Income Tax (amended), Thanh Hoa Provincial Tax Department proposed to supplement a flexible adjustment mechanism for the income threshold of dependents.
According to the draft, dependents eligible for family deduction must have an average monthly income in the year from all sources of income not exceeding 3 million VND. This level is 3 times higher than the current regulation of 1 million VND/month.
Thanh Hoa Provincial Tax Department assesses that raising the income threshold to 3 million VND is a positive step forward, better reflecting the current level of income and living expenses. However, this agency believes that setting an absolute number will easily lead to a backward situation after a period of time, similar to the obstacles of old regulations.
The unit proposed to supplement regulations allowing adjustment of the income threshold for dependents in cases where the consumer price index (CPI) fluctuates by more than 20% compared to the time the circular took effect. At that time, the Ministry of Finance will report to the Government to submit to the National Assembly Standing Committee to adjust the income level according to reality. According to Thanh Hoa Provincial Tax Department, this regulation will help avoid having to amend and supplement policies in a short time after promulgation, and at the same time protect the rights of taxpayers from the impact of inflation.
This unit also expressed concern about raising the income threshold as a basis for temporary tax deduction from 2 million VND/time to 3 million VND/time.
Regarding the determination of dependents, Thanh Hoa Provincial Tax Department believes that there are still many difficulties, especially for self-employed workers, agricultural producers or those with unstable incomes. The determination of income is mainly based on the commitment of taxpayers, while tax authorities do not have effective control tools.
From there, the unit proposed to supplement the income control mechanism for dependents through personal tax identification numbers and income payment data on the electronic database system of the tax industry.
Explaining the above contents, the Ministry of Finance said that the 2025 Personal Income Tax Law has assigned authority to the Minister of Finance to regulate the income level of dependents.
According to the Ministry of Finance, the determination of this income level will be based on many factors such as people's living standards, average social income, consumer price index and related socio-economic indicators to ensure compliance with each development stage.
In the draft circular, the income level of dependents is currently regulated at 3 million VND/month. In case economic indicators have major fluctuations in the future, the Minister of Finance will consider issuing an adjustment document according to his authority. Therefore, the drafting agency believes that it is not necessary to pre-stipulate the principle of adjustment in the circular.
Regarding the proposal to supplement the income control mechanism for dependents, the Ministry of Finance said that the draft circular has clearly stipulated the responsibility of taxpayers in determining dependents who do not have income or have average monthly income in the year from all sources of income not exceeding the prescribed level.
Taxpayers must also be responsible for the accuracy and truthfulness of the declared information. In case the tax authority detects that the declaration is not true to reality, the taxpayer will be handled according to the provisions of law.
The level of 3 million VND may quickly become outdated
Assessing this content, Mr. Le Van Tuan, Keytas Tax Accounting Co., Ltd. said that maintaining an income level of 3 million VND/month to identify dependents still has many unreasonable points.
First, the average spending per capita in 2024 has reached about 2.977 million VND/month. By 2026, this figure is estimated to be at least about 3.5 million VND/month, so the threshold of 3 million VND may no longer reflect the reality.
Second, taking the average spending per capita of the whole country as a basis is not suitable for the group of people who pay personal income tax. According to experts, most workers with taxable income are concentrated in large cities, where spending levels are significantly higher than the national average.
Third, Mr. Tuan believes that there should be an automatic adjustment mechanism instead of depending on the decision of the management agency. In fact, the income threshold of 1 million VND/month for dependents or the threshold of 2 million VND for 10% tax deduction were both maintained for too long before being adjusted.
According to Mr. Tuan, a more appropriate option is to link the income threshold of dependents with the regional minimum wage. When the regional minimum wage is adjusted annually, this income threshold will also automatically increase correspondingly, ensuring closeness to life fluctuations and reducing the situation of slow policy updates.
