Low family deduction, difficult to buy social housing
The current personal income tax (PIT) deduction is VND11 million/month for the taxpayer and VND4.4 million/month for dependents. This amount was adjusted in 2020 when the CPI increased by more than 20% in previous years. At the time of adjustment, the tax threshold was considered outdated. Since then, the prices of some goods have increased significantly.
Need to increase family deduction level before calculating personal income tax soon
Recently, the Ho Chi Minh City Real Estate Association (HoREA) has proposed that the Government consider and propose the National Assembly Standing Committee to amend and supplement Article 1 of Resolution No. 954/2020 of the National Assembly Standing Committee in the direction of increasing the "GTGC level" by about 25%, up to 13 - 14 million VND/month for taxpayers and 5.5 million VND/month for dependents. It is also recommended that the draft Housing Law (amended) add the subject "subject to level 1 income tax on income from wages and salaries according to the provisions of the law on personal income tax" to buy, rent-purchase social housing and add the subject "state officials, civil servants, and public employees are not required to meet income conditions".
Mr. Le Hoang Chau, Chairman of HoREA, explained that these recommendations are aimed at avoiding the exclusion of many people who do not meet the "income requirements" and are therefore not allowed to buy or rent social housing. Because the draft Land Law stipulates that in order to buy or rent social housing, the subject must not have to pay income tax on income from wages and salaries according to the provisions of the law on personal income tax. This provision 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 essentially still low-income urban people.
Mr. Chau gave an example of Mr. and Mrs. A. having two small 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 two children as dependents, so he is entitled to a personal income tax of 11 million VND/month for himself and 8.8 million VND for his two children. The total personal income tax is 19.8 million VND. Mr. A. has a taxable income of 24 million VND minus 19.8 million VND, which is 4.2 million VND. Because his taxable income is 50.4 million VND/year, the tax rate is 5%, equivalent to a tax of 2.52 million VND/year, the monthly tax payment is 210,000 VND. Because he is subject to income tax, Mr. A. is not eligible to buy or rent-purchase social housing, and there is no low-cost commercial housing on the market. With the above total income, Mr. and Mrs. A. will hardly qualify for a commercial loan to buy a commercial house.
Proposal to increase VAT rate and taxable revenue
Lawyer Tran Xoa, Director of Minh Dang Quang Law Firm, said that the shortcomings of the low GTGC level have been mentioned for many years but have not been fundamentally revised. If the adjustment of the GTGC level for calculating personal income tax is based on a 20% increase in the CPI, it will take many more years to adjust this level. Not to mention that once it is issued, it will no longer be suitable for reality as has happened before. "Every year, the Government adjusts the regional minimum wage, so the income of taxpayers is also adjusted to increase.
So why don't the authorities use this level to regulate the taxable income tax rate flexibly according to the actual situation? The income tax rate can be equal to 5 months of the regional minimum wage, when the regional minimum wage is adjusted, the income tax rate will also increase accordingly," Mr. Xoa proposed. In addition, according to Mr. Xoa, the current Personal Income Tax Law still has many inappropriate regulations that need to be revised, such as increasing the taxable income for casual income from 2 million VND to 5 million VND before deducting 10% tax; re-regulating the income level to determine dependents to be higher than 1 million VND/month as it is now; for business individuals, annual revenue over 100 million VND, not being able to sell 6 bowls of pho and have to pay tax as it is now...
Dr. Nguyen Ngoc Tu, a tax expert, commented that after the years of the Covid-19 pandemic, people's lives have become much more difficult, combined with high prices of goods and living expenses, so the personal income tax rate should be increased. According to Mr. Tu, the personal income tax rate should be raised to 20 million VND/month for taxpayers and 10 million VND/month for dependents. Reality has proven that even if the personal income tax rate increases, the tax amount of people will not decrease. In the first 4 months of 2023, personal income tax revenue reached about 65,572 billion VND out of the total annual estimate of 154,652 billion VND.
In addition to the GTGC rate, Mr. Le Hoang Chau also proposed that the current 2% personal income tax on real estate transfers on the selling price should be abolished. With the current calculation method, it is unreasonable for people who sell real estate at a loss to also have to pay tax. Previously, in addition to this tax calculation method, there was an additional method of calculating 20% on income (profit), but then the second method was abolished to make it easier for tax authorities to collect taxes.
This causes the problem that the seller declares two prices. The 2% tax calculation on the selling price is the cause of the problem of low price declaration in real estate transfers in recent times. In order for people to declare the correct transaction price, it is necessary to abandon the above tax calculation method and return to calculating tax on the profit. In addition, there should be regulations to strictly punish cases of tax evasion, buying and selling real estate with handwritten documents to avoid taxes. At the same time, state agencies implement digital society, digital government. From there, there will be a database of real estate of individuals, as well as better updated real estate prices on the market, the state has data on public and transparent land price lists on the market.
The draft Law on Personal Income Tax (amended) is expected to be submitted to the National Assembly for comments at the 10th session (October 2025) and approved at the session in May 2026. Many opinions say that while the Law on Personal Income Tax has not been amended, the National Assembly Standing Committee needs to have a resolution on raising the level of VAT to ease the burden on people and reduce the burden on taxpayers.
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