The Ministry of Information and Communications (before the merger) commented: Propose to develop a family deduction level by region to comply with the current Government's salary policy that stipulates the regional minimum wage (4 regions). The reason for the proposal, according to this Ministry, is to comply with the regulations on regional minimum wages in Decree No. 74/2024/ND-CP of the Government, effective from July 1, 2024.
Sharing the same opinion, the People's Committee of Bac Giang province proposed: Regulations on the current family deduction level approach in the direction of leveling, regardless of region. However, this is not in accordance because current law stipulates the minimum monthly salary levels for 4 regions, while the family deduction level does not take into account the income level in each region as different.
Therefore, it is recommended to study and comprehensively and comprehensively review the regulations on family deduction and the deduction level to suit practical living conditions in each region and region in the country. At the same time, it is recommended that the Ministry of Finance promptly submit to competent authorities to amend the Law on Personal Income Tax (replacement) because some provisions in the current Law on Personal Income Tax are no longer suitable for the developed economy as at present and the 2024 Land Law has come into effect.
The document of the Government Portal also expressed the opinion of a citizen: Regulations on family deduction levels should be divided into regions (similar to 4 regions applied to the regional minimum wage). Currently, the cost of living in each region/locality has a huge difference, in which some important factors such as real estate prices (lease/buy), food, consumer goods, services, etc.
Dividing the family deduction levels by region will ensure fairness in tax policy as well as ensure the lives of working people. People also propose that the Government announce and adjust the annual or 2-year family deduction level each time, instead of based on the CPI fluctuations. This will ensure flexible tax policies, changing in accordance with changes in social life.
Regarding the above proposals, the Ministry of Finance said: The regulations on pre-tax deductions ensure the principle that individuals need to have a certain level of income to meet the essential needs of life such as: Eating, staying, traveling, studying, receiving medical examination and treatment..., therefore, income above this threshold must be taxed and only paid for the income above the threshold.
The determination of the family deduction level is based on many factors, in which the regional minimum wage is only a reference basis for determining the family deduction level. However, the regional minimum wage not only has the meaning of of of offsetting inflation but also has the meaning of improving the lives of workers in accordance with the growth of the economy, distinguishing the living standards and costs of workers in different regions. The draft dossier proposing the development of the Law has raised this issue. The detailed and specific revisions will be studied and proposed by the Ministry of Finance when the Law is included in the National Assembly's Law and Ordinance Development Program.
Regarding the consultation on the draft Law on Personal Income Tax (replacement), the Ministry of Finance informed: Agencies and organizations are allowed to collect opinions according to Official Dispatch No. 12738/BTC-CST, including ministries, agencies under the Government, People's Committees (UBND) of provinces and cities, the Central Committee of the Vietnam Fatherland Front, the Vietnam Federation of Commerce and Industry on the proposal to develop a draft Law on personal income tax (replacement), and at the same time send the draft to the Government's and the Ministry of Finance's Electronic Information Portal for public consultation.
The Ministry of Finance has received a total of 64 comments (16/29 ministries and agencies under the Government; 42/63 localities; the Central Committee of the Vietnam Fatherland Front and 6 other organizations and individuals), of which: 35 units completely agreed (9 ministries, branches and 25 provinces, cities and 1 other organization); some other opinions basically agreed, giving opinions on the structure and wording to comply with the provisions of the Law on Promulgation of Legal Documents; the remaining opinions have been fully explained and accepted by the Ministry of Finance".
