This is not only an urgent move but also meets the expectations, waiting, and support of the majority of people, who have repeatedly spoken out about the inadequacies of the personal income tax policy in the context of increasingly escalating living costs.
In fact, maintaining the family deduction of VND 11 million/month (for taxpayers) and VND 4.4 million/month (for each dependent) from 2020 to present has caused much controversy. Because with the rate of inflation and strong fluctuations in market prices, this figure has become outdated, causing low-income wage earners to still have to pay taxes.
Therefore, the proposal to increase the family deduction level to 16 - 18 million VND/month is considered a suitable and urgent solution to accurately reflect the actual income and living standards of the people.
There are concerns that increasing the family deduction level will significantly affect the budget revenue from personal income tax. However, in general, once people's disposable income improves, they will have a positive mentality in spending, stimulating domestic consumption, encouraging businesses to expand production, investment and increase recruitment.
The inevitable result is that market purchasing power is pushed up, business profits are accompanied by increased contributions to corporate income tax, value added tax, special consumption tax, and many other revenues.
This economic cycle not only helps offset the shortfall in personal income tax but also creates a more stable and sustainable source of revenue for the State budget.
Therefore, the proposal to increase the family deduction level is a reasonable adjustment, a positive boost for both workers, businesses and the budget.
This is also an opportunity to "renew" personal income tax policy in a modern direction, keeping up with the pace of economic life, ensuring social security and fairness goals, while not eliminating the motivation for consumption and production.
In the context of increasing living costs, the revision of the family deduction level to about 16 - 18 million VND/month is not only reasonable but also shows concern for people's lives.
An effectively operating economy needs to ensure flexible tax policies that are appropriate to the socio-economic context, to ensure that the overall economy is not affected by the ups and downs of consumption but taxpayers are not disadvantaged.
