31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Economy / Banking & Finance
Vietnam raises monthly taxable personal income threshold by 22%
Ngoc Thuy 11:16, 2020/05/19
With the new threshold in place, set to take effect from January 1, 2020 retrospectively, there would be more than 1 million people whose incomes are not taxable.

The Standing Committee of the National Assembly (NA) has approved the government’s proposal to raise the personal income tax threshold from VND9 million (US$389) per month to VND11 million (US$475), according to Nguyen Truong Giang, deputy chairman of the NA’s Legal Committee and deputy general secretary of the NA.

 Illustrative photo.

Additionally, the family circumstance-based deduction for each dependent of a taxpayer has also been increased from VND3.6 million (US$155.42) per month to VND4.4 million (US$189.96).

Under the existing legislation, a reduction based on family circumstances means a sum of money deductible from pre-tax income from businesses, salary or wage of resident taxpayers.

With the new threshold in place, set to take effect from January 1, 2020 retrospectively, incomes of more than 1 million people will no longer be taxable.

Giang told local media the decision was taken based on the fact that the consumer price index (CPI) rose more than 20% from July 2013 to the end of 2019.

Those having paid income tax based on the previous standard deduction would be refunded by the end of this year.

The NA’s Finance – Budget Committee requested the government to evaluate the impact of the Law on Personal Income Tax in the 2011 – 2020 period to further raise the tax-free threshold, given some public opinions that the VND11-million threshold remains low compared to actual living costs.

With this adjustment, an individual with income less than VND20 million (US$863.44) and one dependent would have to pay tax of VND230,000 (US$9.93), 48% less than the amount paid currently, while those with higher income would be subjected to a 7% reduction in tax amount.

In 2019, over 6.88 million people paid personal income tax of a combined VND79.2 trillion (US$3.41 billion). “The figure would be reduced to VND68.92 trillion (US$2.97 billion), down 13% year-on-year,” the Ministry of Finance estimated.

The ministry expected a higher disposable income as a result of the adjustment would encourage household consumption and spur economic growth.

RELATED NEWS
TAG: Vietnam income tax consumer price index CPI National Assembly inflation
Other news
18:16, 2023/16/04
Vietnam State Treasury to raise US$17 billion through Gov’t bonds in 2023
Government bond is an important source of revenue for the state budget and supports the development of the capital market.
12:00, 2023/00/22
Hanoi eyes comprehensive development in 2023: Mayor
In 2023, the city is determined to successfully implement its yearly socio-economic goals and realize part of the 2021-2025 key development tasks.
16:54, 2023/54/18
EU, Germany fund to enhance public financial management in Vietnam
A robust public finance management system will enable Vietnam to achieve its long-term socio-economic growth.
13:56, 2023/56/17
Vietnam proposed 30% cut in land lease in 2023
Last year, a similar cut caused the state to miss out on VND3.5 trillion (US$150 million) in revenues.
14:58, 2023/58/14
Vietnam's foreign reserves to return to US$100-billion mark by year-end
During the first 10 months of 2022, the State Bank of Vietnam (SBV) was forced to sell an estimated 20% of total foreign exchange reserves to stabilize the exchange rate.
11:03, 2023/03/07
Vietnam’s 2023 GDP growth forecast at 7.2%: Standard Chartered
The forecast comes from the country's solid growth of 8% in 2022.