This proposal is outlined in a draft resolution on adjusting personal income tax relief sent by the Standing Committee of the National Assembly to the Ministry of Justice for appraisal. The Ministry of Finance suggests increasing the current personal relief from 11 million VND to 15.5 million VND per month for taxpayers, and from 4.4 million VND to 6.2 million VND for dependents.
The adjustment is based on the increase in GDP per capita, which has risen by approximately 40-42% since 2020.
According to the Ministry of Finance, with this adjustment, individuals earning 15 million VND per month would not have to pay personal income tax after deducting social insurance, health insurance, and unemployment insurance. Those earning 20 million VND would pay approximately 120,000 VND in monthly taxes after insurance deductions.
An individual with one dependent and a monthly income of 25 million VND would pay 33,750 VND in taxes, while someone earning 35 million VND would pay 265,000 VND. Those receiving allowances, subsidies, or contributing to voluntary pension insurance would pay even less or no tax at all, as these deductions are made before tax calculations.
The Ministry of Finance estimates that with the proposed relief increase, 95% of taxpayers currently in the first tax bracket would no longer be subject to personal income tax. Additionally, some taxpayers in the second bracket would move to the first or become exempt from paying taxes. Similarly, those in higher tax brackets would see a reduction in their payable taxes.
This change is projected to reduce annual state budget revenue from personal income tax by 21 billion VND to approximately 84,477 billion VND. The number of taxpayers would decrease by 2.18 million (49.66%) to 2.21 million, as many move from the first tax bracket to tax exemption.
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Workers at the Dony Garment Company (Vinh Loc A commune, TP HCM), August 2025. Photo: Quynh Tran |
Workers at the Dony Garment Company (Vinh Loc A commune, TP HCM), August 2025. Photo: Quynh Tran
The current personal income tax relief is 11 million VND per month, with an additional 4.4 million VND for each dependent. This has been in effect since July 2020. Taxable income is calculated after deducting insurance, personal relief, allowances, and subsidies. Authorities are required to adjust these figures when the consumer price index (CPI) increases by more than 20%.
Some localities have previously suggested even higher relief amounts than those proposed by the Ministry of Finance. The National Assembly delegation of Dien Bien province, for example, suggested 20 million VND per month (240 million VND annually) for taxpayers and 10 million VND for dependents. They argued this would ensure fairness, nurture revenue sources, help citizens cope with rising living costs, and encourage voluntary tax declaration and payment.
From 2021 to 2025, the CPI increase is estimated to reach 21.24%. However, according to the TP HCM delegation, Vietnam’s CPI, which covers 752 items including essentials like food, beverages, housing, education, transportation, and healthcare, doesn’t accurately reflect the reality of rising living costs. They argue that living costs are more closely tied to a few essential goods like food, clothing, and housing, which have seen significant price increases in the past 5 years. For example, rice prices have increased by almost 40%, pork by over 60%, and apartment prices by more than 50%.
Therefore, the TP HCM delegation recommends a 50% increase in the personal income tax relief, to 16.5 million VND for taxpayers and 6.6 million VND for dependents.
The draft resolution by the Standing Committee of the National Assembly is under review and, if approved, will be applied for the 2026 tax year.
Phuong Dung
