The Ministry of Justice (MOJ) has released a document appraising the draft Resolution of the National Assembly Standing Committee on adjusting the family circumstance deduction for the personal income tax (PIT). 

Under the draft proposal, MOF suggested two options for adjusting the family circumstance deduction for consideration.

Option 1: Adjust the family circumstance deductions based on the CPI growth rate. Accordingly, the taxpayers’ deduction would increase from VND11 million/month to VND13.3 million/month, and the deduction for dependents would rise from VND4.4 million/month to VND5.3 million/month.

Option 2: Adjust the family circumstance deduction based on the GDP income per capita. The deduction for the taxpayer from VND11 million/month would be raised to about VND15.5 million/month, and for each dependent from VND4.4 million/month to VND6.2 million/month.

After gathering opinions, MOF has submitted Option 2. 

Under Option 2, MOF calculates that individuals with income from salaries or wages of VND15 million/month would not have to pay PIT after paying social insurance, health insurance, and unemployment insurance contributions. 

For an income of VND20 million/month, the tax payable would be approximately VND120,000/month after deducting insurance costs. For those with one dependent, an individual earning VND25 million/month would pay VND33,750 in tax, while an income of VND30 million/month would result in a personal income tax of VND265,000. 

If there are allowances, subsidies, or participation in voluntary pension insurance deductible before tax calculation, the tax payable would be lower or exempt.

However, there are still suggestions to raise the family deduction beyond the current proposal.

Specifically, the National Assembly delegation from Dien Bien province recommended increasing the taxpayer deduction to VND20 million per month (VND240 million per year) and VND10 million per month for each dependent. This proposal aims to ensure stability and align with CPI growth through 2025 and the 2026-2030 period.

Meanwhile, the HCMC National Assembly delegation noted that based on recent price fluctuation data, the CPI for basic goods could rise by 50 percent by the end of 2025. They proposed a corresponding 50 percent increase in the taxpayer deduction, bringing it to VND16.5 million per month.

Alongside the increase, they suggested revising tax brackets in the progressive tax table under the amended personal income tax law, with the top-tier taxable income threshold also increasing 50 percent, reaching VND120 million per month.

Additionally, they proposed raising the income threshold for defining a dependent to VND2.5 million per month and increasing the dependent deduction to VND6.6 million per month.

The draft resolution from the National Assembly Standing Committee will be reviewed and, if approved, will apply to the 2026 tax year.

Nguyen Le