No adjustment for family deductions, Ministry of Finance says "doing it according to the law"

On the afternoon of May 29, after the socio-economic discussion of National Assembly deputies, Minister of Finance Ho Duc Phoc explained and clarified the opinions raised by National Assembly deputies.

Regarding the issue of not adjusting the family deduction level, Minister Ho Duc Phoc said that personal income tax has been effective since 2009. At that time, the family deduction level was 4 million VND/month (48 million VND/year) applied to the taxpayer himself and each dependent was 1.6 million VND/month.

When the Personal Income Tax Law was amended in 2013, the family deduction was VND9 million/month (VND108 million/year), each dependent had a deduction of VND3.6 million/month. Along with that, the Law added a provision that when the consumer price index (CPI) fluctuates over 20%, the Government will submit to the National Assembly Standing Committee to adjust the family deduction.

By 2020, the National Assembly has Resolution 954 stipulating the family deduction for taxpayers is 11 million VND/month and each dependent is 4.4 million VND/month.

Minister of Finance Ho Duc Phoc participated in the explanation on the afternoon of May 29 (Photo: Quochoi.vn).

According to Mr. Phuc, according to current regulations, people with one dependent with an income of 17 million or more are subject to personal income tax. If there are two dependents, the income must be over 22 million to pay tax.

“According to the General Statistics Office, the current average income is 4.96 million VND. So to pay tax of 11 million VND, it is 2.2 times higher than the average income. While in the world, it is less than 1 time,” the Minister of Finance explained the reason for adjusting the family deduction level.

Besides, according to the Minister, CPI in 2023 will only increase by 3.25%, in 2022 it will increase by 3.15%, in 2021 it will increase by 1.84%... While according to the Law, CPI must fluctuate by more than 20% to increase the family deduction level.

“This means the Ministry of Finance is complying with the law,” Minister of Finance Ho Duc Phoc emphasized.

Accepting the opinion of delegate Nguyen Thi Thuy (Bac Kan delegation) on the issue of adjusting the family deduction level, the Minister said that the National Assembly Standing Committee has included it in the law-making program, which means that the Personal Income Tax Law will be amended in October 2025 and passed in 2026. If the National Assembly Standing Committee decides to do it immediately and pass it next year, the Ministry of Finance will comply.

Earlier this morning (May 29), delegate Nguyen Thi Thuy said that voters assessed that the family deduction, especially the deduction for dependents (VND 4.4 million/month) is too outdated and needs to be considered and amended by the National Assembly soon, and should not wait 2 years (until 2026) to be approved as proposed.

Regarding the budget allocated for the creation of artistic works, Minister Ho Duc Phoc said that currently, according to Decision No. 558, the Government assigned the Ministry of Culture, Sports and Tourism to have norms and unit prices.

“Currently, not only the Ministry of Culture, Sports and Tourism, but also specialized ministries are facing difficulties. With this budget, the 2021-2025 period has approved a budget of 328.5 billion VND, and this year 42.27 billion VND has been allocated. However, to pay this amount, there must be a norm and a unit price approved by the Ministry of Culture, Sports and Tourism,” said Mr. Phoc.

Regarding the issue of land arrangement, the Minister of Finance said that due to the merger of districts and communes, the authority to arrange land belongs to the People's Committees of the provinces. To change the land use purpose from headquarters land for auction, it is necessary to adjust the planning from headquarters land to residential land, commercial land, and land valuation... before auction can be held. The Ministry of Finance will urge the People's Committees of the provinces on this issue .

Source: https://www.nguoiduatin.vn/chua-dieu-chinh-giam-tru-gia-canh-bo-tai-chinh-noi-lam-dung-luat-a665932.html