Instead of the current personal income tax exemption on interest from all individual bank savings accounts, the proposal would exempt tax only for low amounts of savings. Photo cafef.vn

HÀ NỘI — The Cần Thơ City People's Committee has proposed that the exemption of personal income tax (PIT) on interest from individuals' bank savings should apply only to low amounts of savings.

The proposal was made in a comment from the committee on the Ministry of Finance (MoF)’s draft Law on Personal Income Tax.

According to the Cần Thơ City People's Committee, the draft law should study and expand the tax base. Instead of the current PIT exemption on interest from all individual bank savings accounts, the proposal would exempt tax only for low amounts of savings.

Current regulations stipulate that individuals who receive interest on deposits from credit institutions and foreign bank branches are exempt from PIT. Only companies pay tax on their income from bank deposit interest.

According to data released by the State Bank of Vietnam (SBV) last week, as of November 2024, the total deposits of individuals at banks exceeded VNĐ7 quadrillion, the highest level ever, representing an increase of 7.16 per cent compared to the end of 2023.

In November 2024 alone, individuals deposited an additional VNĐ22.14 trillion into the banking system.

Aside from this PIT proposal, the MoF has also received other comments on the draft Law on Personal Income Tax from other ministries and agencies.

Specifically, the Ministry of National Defence has proposed a tax exemption supplement for income from scientific tasks related to researching, designing, manufacturing and testing equipment for national defence and security. The incentive is expected to attract a more skilled workforce to this field.

The Ministry of Justice has also proposed a PIT exemption for highly qualified workers in various economic sectors. The ministry also recommended a supplement to a provision in the draft law allowing the Prime Minister to decide on tax exemptions or reductions for employees at a number of specific international organisations.

According to the Ministry of Justice, in order to prioritise the development of agriculture, science and technology and social security, a supplement to tax exemptions and reductions is needed to ensure publicity and transparency.

Meanwhile, the Ministry of Agriculture and Rural Development has proposed that the MoF study and include a PIT exemption for income from dividends of members of agricultural co-operatives and farmers who sign contracts with enterprises participating in the Large Field programme, as well as those involved in afforestation and aquaculture production.

In addition to the proposals to exempt PIT, many ministries, branches and localities have also proposed regulations to lower PIT for individuals and family members who suffer losses due to storms and floods.

Responding to the above proposals, the MoF said that the State budget is being restructured to ensure a safe and sustainable national financial system, including by expanding the tax base and minimising the integration of social policies into taxes.

The tax exemption, reduction and deferral policy ensures neutrality according to the Politburo's Resolution 07/2016. The amendment to exempt or reduce tax, therefore, needs to be studied for consistency with current policy, practice and tax reform trends in the world.

The Government is expected to submit the draft Law on Personal Income Tax to the National Assembly for comments at a meeting at the end of this year, before passing the law in May 2026. — VNS