Tax incentives for workers

The Government has recently submitted the draft amended Personal Income Tax (PIT) Law to the 15th National Assembly at its 10th session. The proposed revisions are widely seen as offering significant benefits to workers.

Specifically, the draft law proposes adjusting the progressive tax rate schedule, reducing the number of tax brackets from seven to five, and widening the income ranges between each bracket. This change aims to simplify the tax structure, making it easier for taxpayers to calculate and track their tax obligations while lowering the tax burden across all existing income levels compared to the current schedule. Taxpayers are expected to enjoy greater rights and incentives under the amended PIT Law.

This amendment not only maintains the current deductions for dependents (excluding mandatory contributions such as social insurance, health insurance, unemployment insurance, professional liability insurance for certain occupations, and charitable or humanitarian donations as prescribed), but also expands the range of deductible expenses. Newly added pre-tax deductions include healthcare and education expenses, in line with key resolutions of the Politburo on education, healthcare, and improving public well-being.

In particular, the 50% tax reduction policy for high-tech professionals represents a serious state investment in high-quality human resources, reaffirming the pivotal role of science and technology in shaping the nation’s future development.

Additionally, the amended law increases the personal deduction for taxpayers from VND11 million to VND15.5 million per month and raises the dependent deduction from VND4.4 million to VND6.2 million per month.

With substantially higher deductions, a simplified tax schedule, and the inclusion of essential healthcare and education expenses, the revised PIT Law demonstrates the Government’s deep concern for workers and its commitment to easing their financial burden. This reform is expected to create new motivation for employees to contribute and lay a solid foundation for fair and sustainable economic growth in Vietnam.

Phuong Dong