Currently, individuals earning less than one million dong per month are classified as dependents for personal tax deductions. In a draft Circular guiding several articles of the Personal Income Tax Law, the Ministry of Finance proposes raising this income threshold for dependents to three million dong, three times the current amount.

Dependents are individuals whom taxpayers must support, such as children or parents who have no income, are unable to work, or have low incomes. When calculating tax, taxpayers receive a fixed deduction for each dependent.

The current income level used to determine dependents has been one million dong per month since 2013. After over a decade, the cost of living, spending, and income levels of the population have changed significantly, making this threshold no longer reflective of current realities. Therefore, the drafting agency believes it is necessary to adjust this level to accurately reflect living conditions and the economic income landscape.

Workers at Dony Garment Company (Vinh Loc A Commune, Ho Chi Minh City), 8/2025. *Photo: Quynh Tran*

According to the Ministry of Finance, the proposed increase in the dependent income threshold to three million dong is higher than the average increase in spending and income over the past 12 years and projections for the coming years. This new level also exceeds the income threshold for defining poor households in urban areas under new regulations.

Statistics show a clear improvement in the living standards of the population. Specifically, average per capita spending in 2024 reached approximately 2.98 million dong per month, an increase of about 1.6 times compared to 2014.

Average per capita income reached 5.15 million dong per month, an increase of about two times compared to 2.64 million dong in 2014. The threshold for defining poor and near-poor households is 2.2 million dong per person per month for rural areas and 2.8 million dong for urban residents.

Effective 1/1/2026, the dependent deduction for taxpayers will be 15.5 million dong, and 6.2 million dong for each dependent. Individuals can deduct insurance contributions, dependent deductions, allowances, and subsidies; the remaining amount constitutes taxable personal income.

Phuong Dung