On 19/5, the Ministry of Finance submitted to the government a draft decree detailing several articles of the Law on Personal Income Tax, specifically proposing family deductions for medical and education expenses.

Under this proposal, taxpayers could receive a maximum annual deduction of 47 million dong for medical and education-training expenses before their personal income tax is calculated.

Specifically, medical examination and treatment expenses at domestic healthcare facilities are deductible up to 23 million dong per year. Education-training costs at domestic institutions are deductible up to 24 million dong per year. These expenses must be supported by invoices and receipts; medical expenses also require a detailed statement of examination and treatment costs used at facilities, as stipulated by the Minister of Health.

Under this plan, a taxpayer with one dependent who incurs medical and education-training expenses could receive annual deductions totaling up to 307.3 million dong, equivalent to 28.63 million dong monthly. This sum includes: 15.5 million dong per month for the taxpayer, 6.2 million dong per month for one dependent, and up to 47 million dong per year for medical and education costs.

Consequently, taxpayers with a monthly income exceeding 28.63 million dong will only be required to pay tax, with the tax rate starting from 5%.

Cash transaction at a bank. *Photo: Giang Huy*

The Law on Personal Income Tax, amended by the National Assembly last year, introduced additional regulations concerning medical and education deductions for taxpayers and their dependents.

According to data from the Resident Living Standards Survey, the average annual medical expenditure per person in 2024 was 3.5 million dong, with inpatient care at 10.2 million dong and education-training at 9.6 million dong. The Ministry of Finance estimates the current annual spending for one dependent and the taxpayer themselves to be approximately 20 million dong for medical costs and 21 million dong for education-training.

Thus, the proposed maximum medical deduction is 2.3 times, and the education-training deduction is 2.5 times the average individual expenditure for education-training in 2024.

The Ministry of Finance stated that the total annual family deduction for a taxpayer could be almost 2.45 times the per capita income in 2025 (125.5 million dong). This regulation aims to reduce the tax burden for all taxpayers incurring medical and education-training expenses. Furthermore, taxpayers in lower tax brackets will benefit from a higher percentage of tax reduction.

The Ministry calculates that implementing this plan would reduce annual budget revenue by approximately 7,697 billion dong.

The decree is expected to take effect from 1/7 to align with the Law on Personal Income Tax 2025.

Phuong Dung