In the latest proposed revision of Vietnam’s personal income tax (PIT) policy, the Ministry of Finance suggests increasing personal and dependent deductions, reducing the number of tax brackets, and widening the income range between brackets. But will these changes address the core issue of tax fairness, especially as the structure of worker incomes and expenses has significantly evolved over the years? Higher deductions, fewer brackets After years of anticipation—particularly from salaried employees, the Ministry of Finance has released two key draft documents concerning personal income tax: a draft Resolution from the National Assembly Standing Committee on adjusting family-based deductions, and a draft Law on Personal Income Tax (replacement version). The draft Resolution on increasing the family circumstance deduction, or the personal and dependent deduction, is expected to be reviewed and passed during the National Assembly Standing Committee’s session in September 2025 and take effect from the 2026 tax year. The ministry has proposed two options: – Option 1: Based on a projected 21.2% increase in the Consumer Price Index (CPI) between 2020 and 2025, taxpayers would be allowed a deduction of VND13.3 million/month and VND5.3 million/month per dependent. – Option 2: Based on growth in average per capita income and […]
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