Wednesday, April 8 2020

VietNamNews

Income tax threshold may increase

Update: March, 11/2020 - 08:54
Under the Ministry of Finance's proposal, people with an income of at least VNĐ11 million (US$476) per month will have to pay personal income tax, increasing from the previous level of VNĐ9 million ($389).— Photo tuoitre.vn

HÀ NỘI — The Ministry of Finance has proposed raising the threshold for personal income tax, Tuổi trẻ (Youth) online newspaper has reported.

Under the proposal, people with an income of at least VNĐ11 million (US$476) per month will have to pay personal income tax, increasing from the previous level of VNĐ9 million ($389).

In addition, if a person has a child or a dependent, they will only have to pay personal income tax when they have a monthly income of at least VNĐ15.4 million ($666) instead of VNĐ13.4 million ($579) as before.

Phạm Đình Thi, head of the ministry’s Tax Policy Department said the proposal came after the ministry saw the fluctuation of the Consumer Price Index (CPI) between 2013 and 2019.

Thi said according to data of the General Statistics Office, the CPI, which was calculated at the end of December, had increased about 23.2 per cent from the CPI in July 2013. The adjustment was expected to reduce the financial burden on taxpayers and motivate them to work harder.

He added that the ministry was receiving comments from individuals, organisations and experts on the proposal.

The proposal will be submitted to the Government and the National Assembly Standing Committee for approval after the ministry considered the comments, he said.

It is estimated the State budget would lose about VNĐ10 trillion ($432 million) annually if the proposal takes effect.

Cao Ngọc Tuyến, an employee of a Hà Nội-based bank, said she applauded the proposal.

However, Tuyến said a person with a child or a dependent should only pay personal income tax when they made at least VNĐ17 million ($735) per month, as the cost of raising a child and tuition to send a child to school reached about VNĐ6 million ($259) a month, she said.

Nguyễn Đức Nghĩa, head of HCM City’s Tax Agency Club, said the ministry used the CPI last year to calculate taxable income for the coming years.

It was believed to be unsuitable with reality, he said.

The ministry was advised to re-calculate to adjust taxable income, he said. — VNS

 

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