HCMC – The Ministry of Finance has proposed revisions to the Personal Income Tax (PIT) Law to include deductions for education and healthcare expenses, aiming to ease the tax burden on individuals.
The draft law, expected to be submitted to the National Assembly in October, will revise taxable income definitions and expand exemptions. It also seeks to support green growth and the development of high-skilled labor.
Family-based deductions may be adjusted to better reflect living costs. Current deductions stand at VND11 million for taxpayers and VND4.4 million per dependent. The proposed changes would allow certain essential costs, such as school fees and medical bills, to be deducted.
The ministry is also reviewing the seven-tier PIT rate structure and plans to simplify it. Household business tax thresholds may be adjusted based on actual conditions, with authority possibly transferred to the Government for future revisions.
The ministry will consult the public, businesses, and local authorities before finalizing the law, said Truong Ba Tuan, deputy director of the Tax Policy Management Department under the Ministry of Finance.
PIT is Vietnam’s third-largest source of tax revenue, after value-added and corporate income taxes. In 2023, PIT revenue reached VND189 trillion, up 20% from 2022, accounting for 9.3% of total state budget revenue.
Separately, the tax authority is working to simplify digital tax filing for household businesses. Mai Son, deputy head of the General Department of Taxation, said at a press conference on July 2 that electronic invoices and mobile filing tools are being rolled out to reduce compliance burdens.
A draft amendment to the Tax Administration Law proposes classifying household businesses into four groups based on annual revenue, ranging from under VND200 million to over VND10 billion.
The reforms aim to improve tax administration and adapt to changes in the economy.
