(PLVN) - Currently, many opinions proposing to amend the Law on Personal Income Tax (PIT) all agree that it is necessary to change the family deduction level and tax rates. In the latest proposal on amending the Law on PIT of the Ministry of Finance, these issues have been specifically mentioned.
(PLVN) - Currently, many opinions proposing to amend the Law on Personal Income Tax (PIT) all agree that it is necessary to change the family deduction level and tax rates. In the latest proposal on amending the Law on PIT of the Ministry of Finance, these issues have been specifically mentioned.
Will amend and supplement appropriate family deduction levels
In the submission, the Ministry of Finance cited the 2023 Population Living Standards Survey Report of the General Statistics Office (Ministry of Planning and Investment) showing that Vietnam's average monthly income per capita in 2023 (at current prices) was VND4.96 million and the group of households with the highest income (the group of the richest 20% of the population) had an average income of VND10.86 million/month/person. Therefore, the Ministry of Finance believes that the current deduction for taxpayers (VND11 million/month) is more than 2.21 times higher than the average income per capita (much higher than the common level applied by other countries), equivalent to the average income of the richest 20% of the population.
 |
Tax brackets are very narrow and need to be revised. (Photo: ST) |
However, the Ministry also acknowledged that recently there have been opinions that the family deduction level is still low. In addition, there are also opinions that it is necessary to regulate the family deduction level according to the regional minimum wage, the family deduction level in urban areas and large cities needs to be higher than in rural and mountainous areas due to higher costs.
The Ministry of Finance affirmed that, in essence, the regulations on deductions before calculating taxes ensure the principle that individuals must have a certain level of income to meet the essential needs of life such as food, accommodation, travel, study, medical examination and treatment, etc., therefore, only income above this threshold must pay tax. The application of deductions also aims to exclude low-income earners from paying personal income tax. The family deduction level for taxpayers and taxpayers' dependents according to the provisions of the law on personal income tax is a specific level according to the general level of society, regardless of whether people have high or low incomes, with different consumption needs.
The Ministry of Finance also affirmed that the current family deduction level has been applied since 2020, so it is necessary to review and re-evaluate to propose amendments and supplements in accordance with new conditions. The specific family deduction level needs to be carefully studied and calculated, ensuring that it is consistent with price fluctuations as well as the increase in people's living standards in the recent period as well as forecasts for the coming time. But at the same time, it does not reduce the role of the personal income tax policy in the tax system. Because the "too high" deduction level will obscure the role of the personal income tax policy in performing the functions of this tax (ensuring social equity and income regulation) and will invisibly bring the personal income tax policy back to the "tax policy for high-income earners" as in the previous period.
Widening the tax gap in tax brackets
Currently, according to current regulations, the gap between tax brackets is too narrow, taxable income of bracket 1 from 0 - 5 million VND must pay tax at a rate of 5%. Bracket 2 from 5 - 10 million VND must pay tax at a rate of 10%; bracket 3 from 10 - 18 million VND must pay tax at a rate of 15%. In addition, experts say that the progressive tax rate was applied 15 years ago, from 2009, when the basic salary was only 650,000 VND/month. Up to now, the basic salary has increased to 2,340,000 VND/month, which is 3.6 times higher. However, taxable income remains the same, so there needs to be a strong and comprehensive change in taxable income levels.
The Ministry of Finance also said that through the actual implementation process, there is a view that the current progressive tax schedule is unreasonable, with too many levels and the gap between levels being too narrow, which can easily lead to a jump in tax levels when summing income at the end of the year, increasing the amount of tax payable, and the number of tax settlements increasing unnecessarily, while the amount of additional tax payable is not much.
Therefore, through reviewing the current tax structure and studying the trend of improving people's living standards in the coming time as well as international experience, the Ministry of Finance believes that it is possible to study to reduce the number of tax rates of the current Tax Rate from 7 rates to an appropriate level; Along with that, consider widening the income gap in tax rates, ensuring higher regulation for those with income at high tax rates.
The Ministry affirmed that the amendment of the Personal Income Tax Schedule will be carefully studied and considered and must be consistent with the orientation set out in the Tax System Reform Strategy to 2030, ensuring that it is consistent with the socio-economic context, income and living standards of the people and with international practices, especially with countries with similar conditions, while ensuring the rights of workers, encouraging the development of the labor market in the context of international integration, and ensuring revenue for the state budget.
Source: https://baophapluat.vn/nhieu-de-xuat-sua-doi-luat-thue-thu-nhap-ca-nhan-post539482.html
Comment (0)