Minister of Finance explains that personal income tax family deduction has not been adjusted

During the discussion session on socio-economics and state budget in the hall today, some National Assembly deputies proposed that the Government soon submit to the National Assembly amendments to the Personal Income Tax Law, adjusting the family deduction level to suit the actual situation. This afternoon, Minister of Finance Ho Duc Phoc explained more clearly about this issue.

Bộ trưởng Bộ Tài chính Hồ Đức Phớc phát biểu. — Minister of Finance Ho Duc Phoc speaks.

Speaking at the National Assembly's meeting this afternoon regarding the proposal of some National Assembly deputies regarding the amendment of the Personal Income Tax Law, including the provisions on family deductions, Minister of Finance Ho Duc Phoc said: The Personal Income Tax Law took effect in 2009, when the family deduction was about 4 million VND/month, the family deduction for dependents was 1.6 million VND/month. By the 2013 revised Personal Income Tax Law, the family deduction was 9 million VND/month, about 108 million VND/year and the deduction for dependents was 3.6 million VND/month; at the same time, the law added a provision: when the consumer price index (CPI) exceeds 20% or more, the Government will submit to the National Assembly Standing Committee to adjust the family deduction level.

On June 2, 2020, the National Assembly Standing Committee issued Resolution 954/2020/NQ-UBTVQH on family deductions. In which, the family deduction for taxpayers is 11 million VND/month (about 132 million VND/year) and the deduction for each dependent is 4.4 million VND/month.

"Thus, currently, people with income, with one dependent, must have an income of 17 million VND per month or more to pay personal income tax; if there are 2 dependents, the income must be over 22 million VND to pay personal income tax," the Minister of Finance stated.

Explaining why the family deduction has not yet been adjusted, the Minister of Finance cited data from the General Statistics Office showing that the current average income is 4.96 million VND. Thus, with a tax deduction of 11 million VND, it is 2.2 times higher than the average income, while in the world it is less than 1 time.

Along with that, data from the General Statistics Office also shows that the CPI in 2023 increased by 3.25% compared to the previous year; in 2022 it increased by 3.15% and in 2021 it increased by 1.84%... While according to regulations, it must be over 20% to implement family deductions and increases.

"This means that the Ministry of Finance is implementing the law correctly." Emphasizing this, the Minister of Finance also said that, accepting the opinions of National Assembly deputies, the National Assembly Standing Committee has now included it in the law-making program, that is, it will submit to the National Assembly the amendment of the Personal Income Tax Law at the October 2025 Session and submit it to the National Assembly for approval at the May 2026 Session.

Các đại biểu dự Phiên họp. — Delegates attending the meeting.

"Therefore, if the National Assembly Standing Committee decides to do it right away at the end of this year and pass it next May, we will comply. When considering the option of drafting the law, we will ask for opinions from National Assembly deputies and the people to have appropriate regulations. At the same time, whether or not to stipulate that the CPI must be above 20% before being adjusted will be discussed at that time," said the Minister of Finance.

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