HCMC – The Ministry of Finance has introduced a draft law to reform personal income tax (PIT), focusing on expanding exemptions and reductions to support priority sectors.
The proposed changes include exempting income tax on social welfare programs and employees of specific international organizations, reported the Government news site (baochinhphu.vn).
The draft also suggests a tax-free status for dividends from agricultural cooperatives and income earned through trading emission reduction certificates, aiming to promote sustainable development.
The ministry noted that the current 5% tax on farming cooperative dividends discourages farmers from joining cooperative models. The proposed revision is expected to enhance agricultural investment and productivity.
The draft also includes updates to PIT regulations related to voluntary pension funds to align with Vietnam’s 2024 Social Insurance Law. Tax exemptions for one-time pension withdrawals are intended to encourage greater participation in retirement programs.
Another significant recommendation is to entrust the Government to adjust family deduction thresholds in line with changes in the consumer price index. This would provide flexibility to adapt to evolving economic conditions.
Additionally, proposed deductions for healthcare, education, and insurance expenses aim to reduce the tax burden and encourage investment in essential sectors. The draft law will require the Government to issue detailed guidelines for its implementation.
