Hanoi, Vietnam – Vietnam's Ministry of Finance is set to introduce a new personal income tax law, aiming to replace the current legislation that has been in place since 2009. The proposed changes come amid growing concerns about the outdated nature of the existing law, especially in light of rising inflation and the changing economic landscape.

The draft law is expected to revise 31 out of the current law's 35 articles, representing a substantial overhaul of 88.5% of the existing regulations. The proposed changes will affect various aspects of the tax system, including taxable income, non-taxable income, tax bases, and calculation methods for specific income items. The personal income tax rates for salary and wage income, as well as the family deductions for taxpayers and dependents, are also set to be revised.

Tax experts have argued that the current regulations are outdated and disadvantageous to taxpayers, necessitating the overhaul. For instance, the current monthly deduction of VND 4.4 million (approximately USD 173) for parents supporting children studying at urban universities is considered insufficient to cover even the most basic expenses such as food, accommodation, transportation, and tuition. Additionally, the requirement for dependents to have a monthly average income of no more than VND 1 million (USD 39) to qualify for a family deduction has remained unchanged for a decade, despite rising living costs.

Another point of contention is the top personal income tax rate of 35%, which is higher than the corporate income tax rate of 20%.

The Ministry of Finance has sent official documents to other ministries and agencies, seeking their input on the draft personal income tax law. In the document, the ministry stated that the proposal has been submitted to the National Assembly Standing Committee.

The Ministry of Finance and the government have proposed including the new law in the program for the enactment of laws and decrees in 2025, with discussions to take place in the 10th session of the National Assembly in 2025 and approval in the 11th session in May 2026.

The ministry has urged relevant agencies, organizations, and individuals to submit their comments on the draft personal income tax law.