Experts emphasize that raising the family deduction threshold and accelerating amendments to the Personal Income Tax Law would be welcome news for millions of households across Vietnam.

Millions hope for early reform

First passed in 2007, Vietnam’s Personal Income Tax Law has undergone three revisions. However, after 18 years, several provisions have become outdated in today’s socio-economic context, prompting calls for comprehensive reform.

Many experts argue that waiting until late 2026 for changes is too long, especially given how deeply the law affects the lives of millions. Most taxpayers hope lawmakers will prioritize an earlier amendment.

Speaking to reporters on June 18, Deputy Prime Minister Ho Duc Phoc revealed that the revised law will be submitted for approval at the National Assembly's 10th session using a fast-track legislative process. The announcement was well received by both experts and the general public.

Nguyen Van Thuc, a senior tax and accounting consultant and advisor to the CEO of Hanoi Accounting Group JSC, said the current family deduction level no longer reflects the realities of modern life and fails to uphold the principle of ensuring basic living standards for taxpayers and their dependents.

He explained that raising the deduction threshold and expediting tax reform would significantly ease the financial burden on households.

In addition to increasing family deductions, Thuc advocates raising the income threshold for taxation to reflect contemporary living costs and support dependents appropriately.

Minh Thu, a resident of Hanoi, said the rule requiring individuals without dependents to pay tax on monthly salaries above VND11 million (about USD430) is out of date, especially with rising living expenses.

“I hope the revised law increases the taxable income threshold to at least VND18 million (around USD705) and applies it from early 2026. That would really help ease the burden on workers,” she shared.

Revamping deduction methodology and thresholds

Nguyen Van Duoc, head of policy at the Ho Chi Minh City Tax Consultancy Association and CEO of Trong Tin Tax Consulting & Accounting Co., stressed the urgency of updating the law to increase the family deduction threshold.

According to Duoc, the current method of adjusting deductions only when the Consumer Price Index (CPI) increases by 20% is unrealistic and inflexible.

“In reality, it takes 5–7 years for CPI to rise that much. As a result, the law becomes outdated and fails to reflect actual cost-of-living increases,” he said. “Delayed adjustments hurt taxpayers and reduce the law’s effectiveness.”

Duoc proposed basing deductions on urban living standards to help rural residents gradually catch up. He also recommended allowing the government to adjust deduction levels when CPI changes by as little as 5–10%, without needing National Assembly approval-making tax policy more responsive.

Currently, Vietnam uses a progressive tax scale with seven brackets ranging from 5% to 35%. Duoc believes this is overly complex and suggests reducing it to five brackets for easier calculation and compliance.

He also recommends slowing the rate of progression in lower brackets and accelerating it in higher ones to ease the burden on low- and middle-income earners while maintaining state revenue from high earners.

During the government’s June 21 legislative session, Prime Minister Pham Minh Chinh emphasized the need to collect taxes accurately and promptly-while also fostering development, simplifying tax processes, and facilitating refunds.

Nguyen Le