At the ministry of finance's regular press conference on 2/7, Truong Ba Tuan, deputy director general of the tax, fee, and charge policy management and supervision department, stated that the ministry is collaborating with other ministries, sectors, and localities to develop a proposal for the revised personal income tax law.

He said the ministry is adhering to the government's assigned timeline to ensure the draft law is ready for submission to the national assembly for consideration and passage during the October session.

Previously, many experts suggested revising the personal income tax law in 2025, to take effect from the beginning of 2026, instead of adhering to the current roadmap of mid-2026.

The current personal income tax law, effective since 2008, contains several provisions now considered outdated, including family deduction allowances. The current deduction for taxpayers is 11 million dong, with an additional 4.4 million dong deduction for each dependent, unchanged since 7/2020. The progressive tax brackets for salaried individuals are also deemed no longer suitable.

According to Tuan, the ministry of finance has reported to the government, proposing six key areas for revision in the personal income tax law. The ministry will refine regulations on taxable and tax-exempt income (such as high-tech human resource development and green growth initiatives) and update calculation methods to align with current trends and circumstances.

Additionally, the family deduction allowances will be reviewed to reflect current living standards and macroeconomic conditions. Special expenses such as education and healthcare may be added to the deductible allowances to further support citizens. The tax brackets will also be redesigned for simplification, potentially reducing the current seven brackets.

Furthermore, the ministry of finance will review the taxable income of household businesses to better align with current realities. The ministry will propose to the national assembly to grant the government the authority to adjust this threshold rather than rigidly defining it in the law, allowing for flexibility across different periods.

"After reaching a consensus on the proposed revisions, the ministry will consult with the community, citizens, and businesses," Tuan said.

Personal income tax is the third-largest revenue source in the tax system, following value-added tax (VAT) and corporate income tax. Last year, the state budget revenue surpassed 2 quadrillion dong for the first time. Personal income tax revenue reached an estimated 189,000 billion dong, a 20% increase compared to the previous year. This represents over 9.3% of the total state budget revenue, up from 5.3% in 2011.

Phuong Dung