Why does personal income tax increase sharply?

The accumulated personal income tax revenue in the first three months of the year was 48,470 billion VND, reaching 41% of the 2022 estimate and increasing 14% over the same period in 2021.

Explaining further today, the General Department of Taxation said that this collection progress is “normal”, equivalent to the progress of the same period in previous years. Last year, in the first three months of the year, personal income tax revenue also completed approximately 39% of the whole year plan. The deadline for submitting personal income tax finalization is the end of March, so organizations pay a lot of personal income tax in the first quarter before submitting the final settlement, avoiding late payment tax.

Besides, this year, the economy opened up, no longer implementing long-term and wide-ranging distancing measures, so personal income tax paid to the state budget in the first quarter of the year increased compared to the same period last year, the General Department of tax explanation.

In the first three months of the year, personal income tax paid to the state budget increased by nearly 6,000 billion, mainly thanks to an increase of more than 5,800 billion in taxes from wages and salaries and over 1,200 billion in real estate transfer tax.

Contribution of more than 75% of personal income tax comes from salaried people. This amount in the first 3 months of the year reached 36,467 billion dong, up 19% over the same period (30,630 billion dong).

The second largest contribution was from real estate transfers, inheritance and gifts of real estate – reaching VND 6,259 billion in 3 months, up 24% over the same period.

Besides, income tax from securities transfer reached VND 1,592 billion, up 35% over the same period. Income tax from capital transfer (excluding securities transfer) reached nearly 103 billion VND – double the same period last year (48.6 billion VND).

The Ministry of Finance is also consulting on amending the Law on Personal Income Tax. This is an important revenue when it is among the four taxes that contribute the most to the state budget.

For a long time, the group of salaried people is the largest contributor to personal income tax revenue. However, experts and people both believe that the tax policy for this group has many unreasonable points, related to the level of deduction for family circumstances and the distance between tax calculation levels. In addition, the starting level of tax calculation for business households and individuals is also criticized for being too low.

Quynh Trang