Is a deduction of 4.4 million VND/month enough to raise children in Ho Chi Minh City and Hanoi?

The deduction for dependents is currently only 40% of the taxpayer's, at a mere VND4.4 million/month, while the cost of raising a child is more than the taxpayer's, with a series of expenses such as tuition, food, entertainment, illness, etc.

Mr. Do Quoc Tuan, former deputy head of the Propaganda and Support Department, Ho Chi Minh City Tax Department (now Ho Chi Minh City Tax Department), said that the current family deduction for dependents is too low - Photo: AH

It is unreasonable to only deduct 40% of the taxpayer's dependents.

At the conference to collect comments on the draft Personal Income Tax Law (replacement) organized by the Ho Chi Minh City Tax Consultants and Agents Association on August 5, experts pointed out a series of shortcomings in current regulations and proposed amendments, especially regarding family deductions.

Mr. Do Quoc Tuan - former deputy head of the Propaganda and Support Department of the Ho Chi Minh City Tax Department (now Ho Chi Minh City Tax) - said that the current deduction level is very inappropriate, not only for salaried employees but also for dependents.

The deduction for dependents is currently only 40% of the taxpayer's deduction. Specifically, while taxpayers are currently entitled to a deduction of VND 11 million/month, dependents are entitled to a deduction of VND 4.4 million/month.

"The question is why is the rate set at 40%? In reality, raising a child can cost more than paying taxes because of a series of expenses such as tuition, food, entertainment, illness, etc.

Therefore, I propose to raise the deduction level for dependents to the same level as the employee himself or to at least 60% because 40% is too low and unreasonable with real life," Mr. Quoc Tuan argued.

Mr. Tuan also commented that with the plan to increase the family deduction level and amend the progressive tax schedule in the draft Personal Income Tax Law (replacement), low-income workers will not see much reduction, while high-income workers will see "a little reduction".

He proposed to spread out the taxable income levels in the first few tax brackets of the progressive tax schedule to help low-income workers save some money.

Salaried workers are " discriminated "

Mr. Nguyen Thai Son, former Head of Personal Income Tax Department, Ho Chi Minh City Tax Department (now Ho Chi Minh City Tax Department), said that salaried workers are being "oppressed" - Photo: AH

Meanwhile, Mr. Nguyen Thai Son - former Head of Personal Income Tax Department, Ho Chi Minh City Tax Department (now Ho Chi Minh City Tax Department), commented that salaried workers are being "oppressed".

Mr. Son analyzed: in essence, family deductions are essential expenses to meet basic survival needs such as food, accommodation, travel, study, medical treatment... for workers to live and contribute.

Income after family deductions is subject to personal income tax. This is similar to businesses being allowed to deduct reasonable and valid expenses before being subject to corporate income tax.

According to the Law on Value Added Tax (VAT) effective from July 1, 2025, individuals in production and business with a revenue threshold of less than 200 million VND/year (equivalent to 16.6 million/month) are exempt from tax.

Meanwhile, the new family deduction level that the Ministry of Finance proposed to increase for salaried employees according to the highest plan is only 15.5 million VND/month for taxpayers, 6.2 million VND/month for dependents, according to Mr. Son, is not satisfactory.

The tax rate at which wage earners are subject to a progressive tax schedule is also unreasonable when compared with the corporate income tax rate.

The corporate income tax rate applicable to businesses with revenue under 3 billion VND/year is only 15%. Businesses with revenue from 3 billion to under 50 billion VND also only have to pay tax at the rate of 17% after deducting all reasonable expenses.

Meanwhile, for workers with an income of 3 billion VND/year (equivalent to 250 million VND/month), if they choose the family deduction according to option 2, the tax rate on income will be up to 28%.

It is even more "unfair" when individual workers are only given a small family deduction, the rest of their income is subject to tax.

Mr. Son proposed that the Ministry of Finance study and design a maximum tax rate of 25% to ease people's burden.

Family deductions should be fair, not equal .

Tax expert Vo Thanh Hung - Photo: AH

Tax expert Vo Thanh Hung commented that although the draft law is called a replacement law on personal income tax, in reality the draft law is only at the level of "amendment and supplement" and cannot be a replacement in the true sense of the word.

"From January 1, 2026, there will be no more tax collection for business households. Business households selling goods must issue invoices from cash registers connected to tax authorities, but paradoxically, individuals will be allocated a fixed monthly deductible expense.

Recently, the tax authority organized a lottery of invoices to encourage individuals to get invoices, but what do they do when they don't get any deductions?", Mr. Hung asked.

He also emphasized that the family deduction should be fair and not equal because the cost of living in urban areas is very high, especially in special urban areas such as Hanoi and Ho Chi Minh City. At the same time, it is necessary to deduct enough for 7 basic needs including: food, clothing, housing, transportation, entertainment, education , and health care, not just for education and health care.

"If we allow tax payers to deduct when they go out to eat, and supermarkets take receipts to deduct, then when workers spend money, they will automatically get a receipt, and service providers will also be forced to issue invoices and cannot avoid taxes, from there the policy will easily enter life," Mr. Hung suggested.

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Source: https://tuoitre.vn/giam-tru-4-4-trieu-dong-thang-sao-du-nuoi-con-o-tp-hcm-ha-noi-20250805200836991.htm