The amount of family deduction should be realistic

Level family allowances personal income tax currently at 11 million VND for individual taxpayers and 4.4 million VND for dependents. Right from 2020 when the 14th National Assembly Standing Committee passed a resolution on this family deduction, many opinions said that compared to the actual cost, it was outdated.

However, after 2 years with many price fluctuations, it is still not possible to make the adjustment because of the regulations that only correct the family deduction for individual income taxpayers when the consumer price index (CPI) fluctuates over the world. 20%.

5 million VND is the minimum cost for eating and studying for a 2nd grade student at a public school in Ho Chi Minh City. It is called the minimum cost because according to Ms. Loan (Ward 9, Go Vap District, Ho Chi Minh City) it only includes the cost of boarding school, 2 meals at home and other necessary food supplements.

“Expense is a lot, higher than adults. For example, clothes, books, or sometimes illness. The family deduction is only 30-40%”, Ms. Loan said.

Lawyer Nguyen Van Hau – Member of the Central Committee of the Vietnam Fatherland Front said: “Many voters reflect to the Fatherland Front that many business expenses are deducted from corporate income tax. While individuals have living expenses that are not deductible. We find this unreasonable.”

The level of family deduction should be realistic. Illustration – Photo: Dan Tri.

Family deduction is understood as the minimum cost to ensure the minimum living needs of an individual and their dependents. However, while people’s spending has increased 4-5 times, the adjustment of family deduction has only been made twice since 2009 when the Personal Income Tax Law took effect until now. The reason according to the provisions of article 19 of this Law, the adjustment is only made when the consumer price index (CPI) fluctuates above 20%.

“In the current context, when the Tax already online, the adjusted 20% figure probably doesn’t make sense anymore. Every year, the Ministry of Finance should provide guidance and calculate the family deduction from the beginning of the year and that is the basis for that year’s tax,” said Dr. Huynh The Du – Economist.

Many experts suggested, if still based on the consumer price index, CPI should only stop at a fluctuation of 5 – 10% to overcome the inadequacies, the deduction for taxpayers should be 4 – 5 times the salary. regional basis, the deduction for dependents is equal to 50% of the taxpayer.

Increase the base salary, increase the personal income tax deduction at this time so that the policy is both effective and a driving force for economic recovery and development.

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