HA NOI — The Ministry of Finance has proposed the Government to revise the Law on Personal Income Tax (PIT) to increase the taxable income threshold and dependant deductions in accordance with the current economic situation.
The revision, expected to go into effect in 2014, is a move to improve living standards at a time when prices continue to rise as a result of the global financial crisis and recession.
The taxable income threshold is expected to increase from the current VND4 million to VND6 million (US$286) per month while the dependant deductions will be from VND1.6 million to VND2.4 million ($114) each.
Speaking at a press conference held on Thursday in Ha Noi, Deputy Head of the ministry's Tax Policies Department Nguyen Van Phung said the revision was suitable as it was researched and developed based on GDP growth, fluctuations in the consumption price index (CPI), the project on salary policy reform, sociological survey results conducted by the General Department of Statistics and references to international research and experiences.
According to Deputy Minister of Finance Vu Thi Mai, the revision will result in a deficit of about VND8,150 billion ($388 million), which would not have a significant impact on the State budget.
If the revision were approved by the National Assembly, the PIT bracket would maintain six tax levels. For example, people who earn a monthly taxable income of less than VND5 million, the PIT rate is 5 per cent; for income between VND5 million and VND10 million, the tax rate goes up to 10 per cent. Monthly income from VND52 million to VND80 million is subject to the highest tax rate of 30 per cent. — VNS