Vietnam - Opinions differ on personal tax threshold lift

The higher threshold for personal tax income proposed by the government was Wednesday put on the table at the National Assembly meeting, where opposite opinions were voiced by the NA Standing Committee and the Finance and Budget Committee.

In August, the government gave a go-ahead for the proposal to amend the personal income tax law developed by the Ministry of Finance, which aims at increasing the personal tax threshold to VND9 million a month, up from the current VND4 million. (VND1 million = $48)

Taxpayers will be allowed to deduct VND3.6 million for each dependent they have to take care of, while the current rate is VND1.6 million. Dependents are those who earn less than VND500,000 a month.

Many members from the Standing Committee expressed their agreement towards the plan, while those from the Finance and Budget Committee said the threshold should be only VND7 million, and the deduction for dependents, VND2.8 million.

The meeting thus witnessed a heated discussion over the issue.

“I highly support the view of the government and disagree with the Finance and Budget Committee,” said NA Deputy Chairman Huynh Ngoc Son.

“Why don’t we increase the threshold to protect taxpayers?”

Son said paying more taxes does not necessarily mean building a better country.

“What matters is how the taxes are used to avoid corruption and waste,” he said.

In response, chairman of the Finance and Budget Committee Phung Quoc Hien also said their proposal was intended “for the public.”

“When calculating the tax threshold, we should take into account all issues, including the state budget collection,” he told attendees.

With the average monthly wage of a university graduate working for a state company currently standing at only VND2.8 million, it is impossible for the dependent deduction rate to be VND3.6 million, he said.

Chairman of the NA Judiciary Committee disagreed, saying: “We should not worry about the fact that the state budget collection will lose a huge amount of money due to the increased personal tax threshold.”

“There are many other ways to save the budget. Better fighting against corruption, for instance, will help save hundreds of trillions of dong every year,” he added.

Meanwhile, NA Chairman Nguyen Sinh Hung said the VND9 million threshold, as suggested by the government, is in conformity with the current economic context.

“The NA Standing Committee will convene for another session to reach the final agreement and report to the NA about the issue,” he said.

NA deputy chairwoman Uong Chu Luu also demanded that if the proposal is approved by the NA in the October meeting, it should take effect on January 1 to encourage taxpayers, rather than from July, as earlier suggested by the finance ministry.

Tuoi Tre

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