Low tax deductibles for dependents outdated: legislator
The current personal income tax (PIT) deductible amount of VND4.4 million ($173) for each dependent no longer meets real living conditions, said lawmaker Nguyen Thi Thuy.
At the ongoing plenum of the legislature on Wednesday, Thuy proposed that the government submit amendments to the PIT Law by the end of October 2024 for legislative approval in May 2025 instead of 2026 as currently proposed.

Nguyen Thi Thuy, a legislator representing Bac Kan province, northern Vietnam. Photo courtesy of the National Assembly's news portal.
The current PIT-deductible amount, which became effective in 2020, is VND11 million ($432) for the taxpayer and VND4.4 million ($173) per person dependent on the taxpayer. A dependent is defined as a person below working age or those with low or no income.
“The deductibles, especially for dependents, are outdated. It's especially the case in big cities, causing disadvantages for taxpayers,” she noted, stressing the need to amend the PTI Law earlier than 2026 as currently proposed.
Over the past five years, prices of many essential goods and services have increased, with some experiencing faster price hikes than incomes. For example, education prices have risen 17%, food 27%, and especially gasoline 105%, Thuy argued.
Many voters shared that if a family has young babies, they must hire a babysitter, with a salary not less than VND5 million ($196.4) per month. In addition, the cost of education is very high, making up the majority of a family's expenses.
"If we have to wait another two years for the revised Personal Income Tax Law to be approved, many people will still have to pay PIT even though their incomes are low," she added.

Minister of Finance Ho Duc Phoc. Photo courtesy of the National Assembly's news portal.
In response, Minister of Finance Ho Duc Phoc said the government had submitted its proposal on adjusted PIT deductibles to the National Assembly Standing Committee in 2013 as the consumer price index (CPI) had risen by over 20%.
"However, General Statistics Office data shows that the CPI increased only 11.47% from 2020-2023. That means the ministry is following the rules," he noted.
"Moreover, the average income is now VND4.4 million per month. The current PIT-deductible amount of VND11 million is 2.2 times higher than the average income. Meanwhile, the deductible amount in other countries is less than the average income," Phoc added.
However, many experts and voters held that the PIT Law’s provisions and the current criteria for CPI growth of over 20% based on a basket of 752 items is unreasonable, as only 20 essential commodities directly affect people's spending. This does not reflect fluctuations in spending among residents and households, they argued.
They added that the current deductibles are unsuitable for the conditions of a lower middle-income country like Vietnam.
A salary reform policy is expected to be put in place from July 1, 2024, worrying workers, as a pay rise would increase the amount they have to pay in taxes. Untimely adjustments will directly affect the purpose of this policy, they said.
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