About 1 million people won’t have to pay personal income tax
Reducing tax obligations will be a resource for taxpayers to reinvest. Photo: TL |
Budget revenue to fall by VND10,800 billion
According to Clause 4, Article 1 of Law No. 26/2012 / QH13 (Law on Personal Income Tax), in case the consumer price index (CPI) changes by more than 20% compared to the effective time of law or the latest time of adjusting the family circumstance-based reduction level, the Government submits to the Standing Committee of the National Assembly for adjustment of the family circumstances-based reduction specified in this clause in conformity with changes of price in order to apply for the next tax term.
According to the General Statistics Office, the CPI at the end of December 2019 compared to July 1, 2013 was 123.2%, up 23.2%. Based on the provisions of Clause 4, Article 1 of Law No. 26/2012 / QH13, it is necessary to study the adjustment of family circumstance-based reduction for personal income tax.
Accordingly, the Government proposes to adjust the family circumstance-based reduction level specified in Clause 1, Article 19 of the Law on Personal Income Tax (amended and supplemented in Clause 4, Article 1 of Law No. 26/2012 / QH13) as follows: the deduction level for taxpayers is VND11 million per month (VND132 million per year); the deduction level for each dependent is VND4.4 million per month.
Mr. Tran Quang Chieu, Standing Member of National Assembly's Finance and Budget Committee: The adjustment of the family circumstance-based reduction level based on the CPI is perfectly reasonable with the current law. This content is prescribed in Clause 4, Article 1 of Law No. 26/2012 / QH13. With other criteria such as: GDP per capita, regional minimum wage, income and average social spending, etc. The Ministry of Finance should study and consult the revision of the provisions on the family circumstance-based reduction level in the PIT Law later. |
Mr. Nguyen Truong Giang, Vice Chairman of the Legal Committee and Deputy General Secretary of the National Assembly, said that at the 45th session, the National Assembly Standing Committee reviewed and decided to agree with the Government's proposal on raising the family circumstance-based reduction level as mentioned above. The new family circumstance-based reduction level will apply from the 2020 tax term.
The new family circumstance-based reduction level will reduce the level of PIT payable for all taxpayers, ensure consistency with changes in CPI and reduce the state budget revenue about VND10,800 billion per year (equivalent to a 14% reduction of the total state budget revenue on PIT from salaries and wages in 2019). The Ministry of Finance said that this adjustment will contribute to alleviating difficulties for taxpayers in the context of increasing prices and inflation compared to 2013. The tax payable will be reduced for all taxpayers, in which the reduction level of the tax payable by the group of taxpayers at the low level will be higher than those at the high level.
Those have income of more than VND20 billion must pay tax
Commenting on this content, Mrs. Pham Thi Thu,Director of Hung Linh International Trade Company, said that raising the family circumstance-based reduction level upon PIT calculation has been significant in the difficult economy situation due to the Covid-19 pandemic. This is a positive move of the State to support and share the burden with taxpayers. When the family circumstance-based reduction level increases, the PIT will falland the remaining income of taxpayers will increase. Thereby, taxpayers will face fewer difficulties and have conditions to take care of their lives, families and children. Especially, for taxpayers in the business sector, their incomes and employees’ incomes will be a source to reinvest in business and production activities, making more contributions to society.
As an expert, Mrs. Nguyen Thi Cuc, Chairwoman of the Vietnam Tax Consultants' Association (VTCA) said: motivated by this adjustment, about one million people who are paying the PIT at level 1 will not have to pay anymore because under the current deduction level, those who have two dependents and an income of over VND16.2 million per year have to pay PIT. When thefamily circumstance-based reduction increases to VND11 million per person, dependents is VND4.4 million each, this means that those who have income over VND19.8 million must pay PIT. Those who have higher incomes and have to pay taxes at the second level on wards will be benefitted when the tax payable falls significantly. The adjustment level is also quite reasonable and currently higher than many other countries in the world. Not to mention, an individual with an income of VND20 million per month from salaries and wages in big cities, this level is normal, but in rural and mountainous provinces, this level is relatively high.
From the research perspective, Mr. Truong Ba Tuan, Deputy Director of the Institute of Financial Strategy and Policy (Ministry of Finance), said that people with lower incomes will benefit more from this adjustment. However, in the long term, it is necessary to have a plan to summarize and assess the PIT Law, thereby reporting to the Government to submit to the National Assembly for consideration and amendment to the law at an appropriate time, to ensure consistency with the overall reform of tax policy system, and compliance withsocio-economic development.
Related News
Ensure harmony of interests of “3 parties” when applying 5% VAT on fertilizers
08:54 | 30/10/2024 Regulations
Businesses can choose a suitable electronic invoice model generated from the cash register
14:18 | 25/10/2024 Finance
Tax, fee, and land rent exemption, reduction, and deferral policies: a driving force for business recovery and growth
11:34 | 27/10/2024 Regulations
Rush to finalize draft decree on public asset restructuring
09:28 | 29/10/2024 Finance
Latest News
M&A activities show signs of recovery
13:28 | 04/11/2024 Finance
Fiscal policy needs to return to normal state in new period
09:54 | 04/11/2024 Finance
Ensuring national public debt safety in 2024
17:33 | 03/11/2024 Finance
Removing many bottlenecks in regular spending to purchase assets and equipment
07:14 | 03/11/2024 Finance
More News
Continue to handle cross-ownership in banks
10:35 | 02/11/2024 Finance
Striving for average CPI not to exceed 4%
16:41 | 01/11/2024 Finance
Delegating the power to the government to waive, lower, or manage late tax penalties is suitable
16:39 | 01/11/2024 Finance
Removing difficulties in public investment disbursement
09:30 | 31/10/2024 Finance
State-owned commercial banking sector performs optimistic growth, but more capital in need
09:28 | 31/10/2024 Finance
Stipulate implementation of centralized bilateral payments of the State Treasury at banks
09:29 | 29/10/2024 Finance
Inspection report on gold trading activities being complied: SBV
14:37 | 28/10/2024 Finance
Budget revenue in 2024 is estimated to exceed the estimate by 10.1%
10:45 | 28/10/2024 Finance
Ensure timely and effective management and use of public asset
11:31 | 27/10/2024 Finance
Your care
M&A activities show signs of recovery
13:28 | 04/11/2024 Finance
Fiscal policy needs to return to normal state in new period
09:54 | 04/11/2024 Finance
Ensuring national public debt safety in 2024
17:33 | 03/11/2024 Finance
Removing many bottlenecks in regular spending to purchase assets and equipment
07:14 | 03/11/2024 Finance
Continue to handle cross-ownership in banks
10:35 | 02/11/2024 Finance