Family deduction level not adjusted

According to the Government's regular January Resolution, the Ministry of Finance was assigned to study and propose increasing the family deduction for calculating personal income tax to ease people's lives. This is also a request assigned by the National Assembly at the June 2023 session.

Currently, the family deduction for individual taxpayers is 11 million VND, with a deduction of 4.4 million VND for each dependent, maintained since July 2020. Of which, 11 million VND is determined by the tax authority as "the spending level to meet the minimum living needs of a person", and 4.4 million VND is determined as 40% of the taxpayer's own deduction. This deduction level is considered by many experts to be outdated and not keeping up with people's living standards.

At the first quarter press conference on the afternoon of March 29, Mr. Truong Ba Tuan, Deputy Director of the Department of Tax, Fee and Charge Policy Management and Supervision, said that the adjustment of the family deduction level is based on law amendments or when the consumer price index fluctuates by 20%. The Personal Income Tax Law stipulates that when the CPI fluctuates by more than 20% compared to when the law takes effect or the time of the most recent adjustment of the family deduction level, the Government will submit to the National Assembly Standing Committee an adjustment in accordance with price fluctuations to apply to the next tax period.

According to him, in fact, Vietnam has adjusted this deduction level in 2012 (from 4 million VND to 9 million VND per month) and 2020 (from 9 million VND to 11 million VND per month).

Mr. Tuan said that from 2020 to now, through monitoring, the CPI has not fluctuated to 20%, so the ministry will continue to monitor the development of this index to make proposals according to regulations. He also said that when amending the Law on Personal Income Tax (2025 roadmap), the ministry will amend related contents, including taxable income, tax calculation, and family deductions.

Personal income tax includes tax from salaried employees (mainly) and income tax from business individuals. This is one of the three pillar taxes, contributing significantly to the state budget, along with corporate income tax and value added tax.

Regarding life insurance, Ms. Nguyen Thu Phuong, Deputy Director of the Department of Insurance Management and Supervision (Ministry of Finance), said that the unit has completed inspections of 5 insurance companies.

The agency publicly announced the inspection results of Dai-ichi Life Insurance Company in early February on the agency’s information portal. She also said that in addition to publishing on the website, the agency also published through a meeting with the person who signed the inspection decision, and related individuals and organizations.

The main violations of insurance companies are mainly related to the issuance of regulations and supervision of insurance agents that are not in accordance with regulations; the management and use of insurance agents are still in violation; and accounting and bookkeeping are still negligent.

Administrative violations have been punished. Currently, this agency is coordinating with the Tax Department to handle issues related to tax debts.

This year, the Ministry of Finance will inspect six insurance companies, including two that sell investment-linked insurance products with banks, Mirae Asset Prévoir and Cathay Life Vietnam. Along with the inspection, the management agency will strictly handle cases where violations are discovered by insurance agents.

The insurance market, especially the bancassurance channel, has grown rapidly in recent years, but there are many negative aspects. For example, banks force borrowers to buy insurance or confuse this product with savings.

In a report sent to National Assembly delegates before the question-and-answer session at the National Assembly Standing Committee on March 18, Finance Minister Ho Duc Phoc assessed that bancassurance helps diversify insurance exploitation activities, but this service makes the market more complicated and needs to be rectified.

TB (according to VnExpress)

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