Specifically, Resolution No. 954 dated June 2, 2020 of the National Assembly Standing Committee stipulates that the deduction for personal income tax payers is VND 11 million/month and the deduction for each dependent is VND 4.4 million/month. However, according to HoREA, this family deduction is no longer suitable for the normal spending needs of households, so it is proposed that the National Assembly Standing Committee consider increasing it by about 25%.
Accordingly, the deduction for taxpayers increases from 13 - 14 million VND/month and the deduction for each dependent increases to 5.5 million VND/month.
Regarding the subjects eligible to buy, hire-purchase, or purchase social housing. According to HoREA, Point b, Clause 1, Article 75 of the draft Housing Law (amended) stipulates that the conditions for being eligible to buy or hire-purchase social housing are that one must not have to pay personal income tax on income from wages and salaries; must be a poor or near-poor household; and must be eligible for housing improvement support according to the Ordinance on Preferential Treatment for People with Revolutionary Contributions.
Currently, the supply of social housing is too small compared to demand.
Currently, the draft Law on Housing (amended) stipulates that income conditions for subjects buying or leasing social housing must be exempt from paying income tax according to the provisions of the law on personal income tax, except for subjects allowed to buy or lease housing for the armed forces, who are not required to meet income conditions.
This regulation has excluded many people who do not meet the income requirements and are therefore not allowed to buy or rent social housing. Because, although these people pay personal income tax, the tax rate is very low and they are still low-income people.
HoREA cited an example of a couple Mr. and Mrs. A with 2 young children. Mrs. A has an income of 10 million VND/month, so she is not subject to personal income tax. Mr. A has an income of 24 million VND/month and declares his 2 children as dependents, which are deducted as follows: 11 million VND for Mr. A and 4.4 million VND for each of the 2 children. Thus, each month Mr. A is exempted from family circumstances of 19.8 million VND. After being exempted from family circumstances, Mr. A has a surplus of 4.2 million VND/month. Because his taxable income is 50.4 million VND/year to less than 60 million VND/year (belonging to level 1 of the personal income tax levels). Therefore, according to the provisions of the Personal Income Tax Law, Mr. A is subject to a tax rate of 5% and must pay personal income tax of 2.52 million VND/year. Because he is subject to personal income tax, Mr. A is not eligible to buy or rent social housing. While there is no low-cost commercial housing on the market, with the total income as above, Mr. and Mrs. A will hardly be eligible to borrow credit at commercial interest rates to buy commercial housing.
From the above example, HoREA proposes that the Government and the National Assembly Standing Committee consider expanding the scope of personal income tax payers in level 1 of the personal income tax brackets under 60 million VND/year to be able to buy or rent-purchase social housing.
Also according to HoREA, Point b, Clause 1, Article 75 of the draft Housing Law (amended) stipulates that subjects belonging to the armed forces who purchase or lease-purchase housing for the armed forces are not required to meet income requirements. While subjects belonging to the armed forces are also civil servants and public employees, it is proposed to apply a mechanism that does not require civil servants and public employees to meet income requirements when purchasing or leasing social housing.
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