The National Assembly discussed the draft Law on Personal Income Tax (amended): Increasing the family deduction level, meeting the expectations of many workers

Increase the family deduction

On October 17, the National Assembly Standing Committee passed a Resolution on adjusting the family deduction of personal income tax. Accordingly, the new deduction for taxpayers is 15.5 million VND/month, for each dependent is 6.2 million VND/month, after deducting social insurance, health insurance, and unemployment; applied from the 2026 tax calculation period.

With the new deduction, taxpayers without dependents will have to pay taxes if their income exceeds VND 17.285 million/month. If there is one dependent, the tax rate will increase to 24.22 million VND/month; and for two dependents, it will be 31.155 million VND/month.

The Ministry of Finance said that this adjustment has increased by more than 40% compared to the current level, accurately reflecting the price and income developments in the past 5 years. According to the Ministry's calculation, the adjustment plan will cause the State budget to reduce revenue by about VND21,000 billion per year compared to the collection rate and the number of taxpayers according to the old regulations.

Therefore, the new regulation on raising the personal income tax tax tax tax threshold is a humane message, demonstrating the State's concern for the quality of life of workers.

On the part of workers, many people believe that this adjustment is timely, in line with expectations and brings positive impacts, helping them have more financial space in the context of high living costs.

Ms. Nguyen Thi Thu Trang (Cau Giay Ward, Hanoi), a marketing employee at a technology company, with an average income of about 30 million VND/month and raising two young children, shared that if the new deduction is applied, she will not reach the tax payment threshold.

Previously, I still had to pay a small amount of money every month, even though my two childrens tuition and food expenses accounted for nearly half of my income. With the new regulation, I can reserve that part for savings and essential expenses. This helps workers like me feel that the policy is closer to reality, said Ms. Trang.

From the same perspective, Mr. Pham Minh Dung (Thanh Xuan ward, Hanoi), a financial specialist, with an income of about 26 million VND/month and a small child - said that he still has to pay taxes but the contribution rate is "not significant".

"I support the new policy because it helps to extend the tax payment threshold, creating a comfortable mentality for workers. However, rental prices, gasoline and childcare costs have increased continuously, so if they are adjusted again in 2-3 years, it will be inadequate, said Mr. Dung.

Need to calculate and plan for the new phase

Discussing more deeply about personal income tax policies, according to Ms. Le Yen - Director of Hanoi Tax Consulting Company (Hanoi Tax) - commented that increasing the family deduction to 40% is timely and in line with the current economic context.

"People's living standards have increased, and their living expenses have also increased. The National Assembly's approval of increasing the deduction level is very correct and necessary for the next 1-3 years," said Ms. Yen.

Regarding the increase in family deductions that may reduce budget revenue, according to Ms. Yen, this is something that needs to be accepted.

"We are not worried about revenue shortages but are not adjusting. The tax reduction helps people have more ability to spend, study, and invest, thereby creating economic growth again," Ms. Yen analyzed.

Regarding the ability to adjust the family deduction according to the consumer price index (CPI) or average income, Ms. Le Yen said that it is necessary to be cautious: The automatic adjustment mechanism according to CPI is reasonable but must be flexible. If changes continue, it will make it difficult to implement and guide the work".

According to the new Resolution, the family deduction will be applied from the 2026 tax calculation period. However, Ms. Le Yen expressed hope that it could be applied sooner.

"If it is applied in 2025, it will be more reasonable to support workers. However, the State also needs time to prepare. Anyway, this adjustment is a positive signal" - Ms. Yen shared.

Dr. Nguyen Ngoc Tu - lecturer at Hanoi University of Business and Technology - also said that the increase of more than 40% for the period 2020-2025 is relatively close to reality, but has not yet met practical expectations.

"In the context of recent adjustments to reduce pressure from previous years, this figure has not met expectations. A regulation when changed, especially the family deduction level, needs to be taken into account that this regulation will be implemented in the future, otherwise it will no longer be suitable until 2027-2028" - the expert said.

Mr. Tu believes that from 2025 onwards, the economy will enter a new stage of development, with increased domestic and foreign investment capital, a forecast growth rate of high, causing workers' income to increase, and commodity prices to increase. A bowl of pho today will not be flat in the following years, he said. From there, Dr. Tu emphasized the need to forecast policies for the period of 2026-2030, even until 2035, to ensure long-term and stable implementation of personal income tax policies.