Increase family deduction depending on Consumer Price Index

The Ministry of Finance is proposing to comprehensively amend the Personal Income Tax (PIT) Law with 7 policy groups including taxable income, tax-exempt income, family deduction regulations, tax tables, tax rates, etc.

It is expected that the draft Law on Personal Income Tax will be submitted to the National Assembly for comments at the October 2025 session and approved in May 2026.

Some people are concerned that the waiting time is still quite long. The current family deduction level puts a lot of pressure on taxpayers in the context of many economic difficulties.

Regarding this issue, at the press conference on January 7, Mr. Truong Ba Tuan, Deputy Director of the Department of Tax and Fee Management and Supervision, Ministry of Finance, said: According to the current Law on Personal Income Tax, in case the consumer price index (CPI) fluctuates by more than 20% compared to the most recent family deduction, the Government will report to the National Assembly for adjustment. The Ministry of Finance has closely monitored the CPI developments in recent times, from 2020 to present, the CPI has not exceeded that 20% threshold.

From 2020 to the end of 2024, the CPI will increase by nearly 16%. Therefore, in 2025, if the CPI fluctuates significantly, the 50th session of the National Assembly Standing Committee in October 2025 will have a resolution related to family deductions (increasing the family deduction level).

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It is expected that this year the family deduction level when calculating personal income tax will be increased. Photo: Thach Thao

Automatic personal income tax refund

At the press conference, Mr. Mai Son, Deputy General Department of Taxation, also said, "In early 2025, the tax industry will try to apply automatic personal income tax (PIT) refunds for the 2024 tax settlement period. The process has basically been revised and is being reviewed."

According to Mr. Son, up to now, in the personal income tax refund process, the tax industry has applied information technology but has not yet achieved complete automation, from the receiving stage to the stage of returning results and issuing refund amounts to taxpayers.

The automatic tax refund process aims to have all stages, from input to output, completely automated. Through the eTax Mobile application, taxpayers can grasp the data when tax amounts to be paid or refunded arise.

In particular, based on the synthesis of the settlement reporting system of the parties related to the taxpayer, the tax authority will integrate and generate a suggested tax settlement declaration and send it to the taxpayer.

On that basis, taxpayers will compare income, deducted amounts, paid amounts, reduced amounts, remaining amounts payable or refunded amounts.

The tax authority will transfer the refund amount to the account number registered by the taxpayer.

“The initial implementation of automatic personal income tax refunds may not be completely smooth. Because, to do this, the tax authority must identify all sources of income that have been deducted, paid on behalf of, paid on behalf of, family deductions... There are items that are on the system, but there are also items that the tax authority must link data to such as charity money... to have the best database,” Mr. Son acknowledged.

Tax experts point out the disadvantages that personal income taxpayers have to bear . In cases where the state budget is misappropriated by taxpayers, taxpayers will be fined, but no one has been held responsible when taxpayers and businesses are late in getting back the overpaid tax, experts share.