On the afternoon of August 7, at the regular Government press conference in July, the press asked whether in big cities like Hanoi or Ho Chi Minh City, there are expensive living expenses, so should the family deduction level be regulated by region or not?
Responding to this question, Deputy Minister of Finance Nguyen Duc Chi said that when studying the adjustment of the deduction level, there were many different opinions with different options on the basis for determining the family deduction level when calculating personal income tax.
Mr. Nguyen Duc Chi said that any option will have "one side, one side, one side", advantages and disadvantages. And the Ministry of Finance assessed that if the family deduction level is regulated by region, there will be limitations and it will be very difficult to implement.
We see that, in a province, a city has different areas with different living costs. Therefore, if the family deduction level is regulated by region, area, and area, it will be very different and different, said the Deputy Minister of Finance.
Taking examples in Ho Chi Minh City and Hanoi, Deputy Minister Nguyen Duc Chi said that there are wards in the core area, that is, the central area, with very high living costs. However, for communes, areas in more remote areas, suburban areas with living expenses, the cost of personal life of a family or a person will be lower, different from the central area.
That is also the reason why this agency only proposes two options to adjust the family deduction level. Option one is based on the adjustment level according to CPI, that is, according to current law. And option two is to adjust to the increase rate of per capita income and the increase rate of GDP.
After collecting public opinions, the Ministry of Finance received many comments and we found that the majority of opinions agreed with the second option, said the Deputy Minister of Finance, adding that the drafting agency is continuing to complete and have the most specific plan to report to the National Assembly Standing Committee and report to the Government according to the process of issuing a legal document.
Previously, the Ministry of Finance proposed 2 options to adjust the family deduction level:
Option 1: Adjust the family deduction according to the CPI increase rate.
With this option, the deduction for taxpayers is from 11 million VND/month to about 13.3 million VND/month. The deduction for each dependent increases from 4.4 million VND/month to 5.3 million VND/month.
Option 2: Adjust according to the rate of increase in per capita income and the rate of increase in GDP per capita.
Accordingly, the deduction for taxpayers is from 11 million VND/month to 15.5 million VND/month; the deduction for dependents increases from 4.4 million VND/month to about 6.2 million VND/month.
Implementing this plan will have the impact of reducing State budget revenue to a higher level. However, when the family deduction is higher, tax payment is less, people's disposable income increases.
In both options proposed by the Ministry of Finance, the family deduction for taxpayers increased by 2.3-4.5 million VND; for dependents by 0.9-1 prompt.8 million VND/person/month compared to the present.
