The outdated personal allowance for taxpayers, coupled with rising living costs, has led to constant complaints from salaried workers that they are struggling to pay taxes. Meanwhile, personal income tax revenue continues to increase, reaching nearly 100 trillion VND in the first six months of 2024, surpassing corporate income tax revenue during the same period.
Even those who tighten their belts still have to bear the burden of taxes.
The majority of salaried workers reported that the rate personal allowance The allowance of 11 million VND/person/month for taxpayers and 4.4 million VND/person/month for dependents is outdated and insufficient to cover living and educational expenses.
Mr. Nguyen Hung ( Hanoi ) - employee salaried employees A resident of Hanoi stated that his total income is approximately 16 million VND per month, and he regularly has to pay personal income tax. Mr. Hung shared that his monthly rent alone costs 8 million VND. For the past two years, his landlord has increased the rent every six months, citing various reasons such as inflation, salary increases, and rising housing prices.
"The cost of living is constantly rising, my wife just gave birth to a baby, and my family is struggling to make ends meet. I've never felt life is this difficult. Income has decreased, but the cost of living has increased. We haven't even had time to celebrate yet." "With the salary increase, I have to worry about paying taxes. The deduction of 4.4 million VND/month/dependent is too low, not enough to cover the costs," Mr. Hung shared.
Nguyen Phuong (Ha Dong, Hanoi), also an employee, said her monthly salary is 18 million VND. After deducting family allowances for her son, Ms. Phuong still has to pay personal income tax every month. According to Ms. Phuong, tuition fees, meals, and boarding costs for elementary school students at public schools alone amount to nearly 2 million VND.
"Besides school, children attend all sorts of extra classes, from English lessons to talent development. Parents work regular office hours, incurring additional costs for transportation. The 4.4 million VND/month family allowance deduction for one child is insufficient; this deduction would need to be at least doubled to cover living expenses in large cities like Hanoi and Ho Chi Minh City," Ms. Phuong suggested.
In contrast to the difficulties faced by taxpayers, personal income tax revenue has been steadily increasing. In the first six months of 2024 alone, personal income tax revenue reached nearly 100,000 billion VND, exceeding revenue from state-owned enterprises by almost 840 billion VND. Total personal income tax revenue in 2023 exceeded 155,000 billion VND. Of this, personal income tax on salaries and wages amounted to 108,228 billion VND, accounting for the highest proportion (approximately 70% of total personal income tax revenue).
Speaking with a reporter from Tien Phong newspaper, a representative from the Department of Tax Management for Small and Medium-Sized Enterprises, Household Businesses, and Individuals (General Department of Taxation) stated that they are compiling difficulties and obstacles regarding personal income tax laws and policies, as well as tax management laws and policies, from tax authorities at all levels and taxpayers. The tax authorities will study and propose amendments to personal income tax laws and policies and tax management laws.
Proposed changes to personal allowance deductions based on region.
Earlier, in early 2024, the Government requested the Ministry of Finance to research and propose a plan to adjust the personal allowance in calculating personal income tax to support and alleviate difficulties in people's lives.
Professor Hoang Van Cuong, former Vice Rector of the National Economics University, believes that the goal of personal income tax is to balance income between high-income earners and low-income earners. Personal income tax has been adjusted three times, but the personal allowance remains unchanged. taxpayer 11 million VND/month and 4.4 million VND/month for dependents is not appropriate.
According to Mr. Cuong, consumption levels vary from region to region. In the city, the personal allowance of 4.4 million VND per month for one child attending school is not enough to cover expenses. Authorities have recently increased salaries, but the additional income must be supplemented. taxable This makes raising salaries less meaningful.
Mr. Cuong suggested that authorities should determine an appropriate tax threshold so that taxpayers' lives are not affected and they can contribute to the state budget. Authorities should also add a reasonable expense deduction that can be substantiated.
Sharing the same view, economist Dinh Trong Thinh believes that the tax threshold and personal allowance should be adjusted to reflect regional differences. For large cities like Hanoi and Ho Chi Minh City, the tax threshold should be raised to approximately 16-18 million VND for household spending, and the dependent allowance should be raised to approximately 6-8 million VND. According to Mr. Thinh, this level of allowance is necessary to ensure taxpayers can adequately support young children and elderly parents.
"Authorities need to review the personal allowance deduction in personal income tax. Many countries, when calculating personal income tax, allow the exclusion of reasonable expenses arising unexpectedly such as illness or investment," Mr. Thinh suggested.
After deducting personal allowances (11 million VND/person/month for taxpayers and 4.4 million VND/person/month for dependents), the personal income tax rates are as follows: income of 5 million VND/month or less: 5%; 5-10 million VND/month: 10%; 10-18 million VND: 15%; 18-32 million VND: 20%; 32-52 million VND: 25%; 52-80 million VND: 30%; and over 80 million VND: 35%. |
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