Ministry of Finance: It is not time to adjust family deductions

Voters say the family deduction is not appropriate, but the Ministry of Finance affirms that it cannot be adjusted when the CPI fluctuates less than 20% compared to the most recent change.

The Ho Chi Minh City National Assembly delegation has just proposed adjusting family deductions to suit the current socio-economic situation. Propose This has been mentioned many times by experts over the past time, when they said that the current way of adjusting family deductions is still unreasonable.

Responding to the proposal on family deduction levels, the Ministry of Finance said that according to the current Personal Income Tax Law, the consumer price index (CPI) must fluctuate by more than 20% compared to the time the Law takes effect or the time of the most recent adjustment of family deductions before the family deductions can be adjusted.

The Ministry cited data from the General Statistics Office, the consumer price index (CPI) increased by 3.23% in 2020; 1.84% in 2021; 3.15% in 2022 and 3.25% in 2023. Thus, the CPI has fluctuated by less than 20% since the last adjustment of the family deduction level (2020), so the Ministry of Finance affirmed that according to the provisions of the current Personal Income Tax Law, it is not possible to adjust the family deduction level.

The Ministry of Finance said that personal income tax is regulated into personal income. The implementation of this tax policy plays a very important role in implementing the redistribution policy. Along with other sources of revenue, revenue from personal income tax has created a state budget fund to meet many needs for investment in development, national defense and security, ensuring social security, and poverty reduction.

Currently, the deduction for the taxpayer himself is 11 million VND and for each dependent is 4.4 million VND per month. Individuals are deducted for insurance, family deductions, allowances, subsidies... the remaining amount is the income used to calculate personal income tax.

The family deduction for taxpayers and dependents is a specific level according to the general level of society, regardless of whether people have high or low incomes with different consumption needs. For individuals facing difficulties due to natural disasters, fires, accidents, or serious illnesses, the Personal Income Tax Law has provisions for tax reduction.

The Ministry of Finance believes that specific family deductions need to be carefully studied and calculated to ensure they are higher than the average GDP per capita, regional minimum wage and average spending per capita over a certain period.

According to the General Statistics Office, Vietnam's average monthly income per capita in 2023 (at current prices) is 4.96 million and the highest income group (the richest 50% of the population - group 5) has an average income of 10.86 million VND per month per person.

The current deduction for taxpayers, according to the Ministry of Finance, is 11 million VND, which is 2.2 times higher than the average income per capita, much higher than the common level applied by other countries from 0.5 to 1 times, and also higher than the average income of the 20% highest income group. The deduction for dependents, according to this agency, is also close to the current average income per capita.

The Ministry of Finance said it is reviewing and evaluating the Law on Personal Income Tax (including the content on family deductions...) to report to the Government, the National Assembly Standing Committee, and the National Assembly for consideration of amendments and supplements according to the National Assembly's law-making program, ensuring compliance with Vietnam's socio-economic conditions as well as international practices.

It is expected that the draft revised Law on Personal Income Tax will be registered in the law-making program in 2025, submitted to the National Assembly for comments in October 2025 and approved in May 2026.

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