Accordingly, as the Ministry of
Finance proposed to the National Assembly for approval, the level for
personal income tax payment will be raised from the current VND4
million to VND6 million per month along with the reduction level for
family dependants being from VND1.6 million to VND2.4 million each.
It argued that the new adjustment will be related to six tax levels
for individual taxpayers. For income earners of VND52 million or more,
they will have to pay at least 30 percent of the total. However, there
is growing concern that the adjustment to be applied as from 2014 is
not in conformity with the reality as the current rate of inflation
hovers around 18 percent and that the value of VND6 million by 2014
will not be higher than VND4 million at the moment.
This means that such tax relief for income earners with family
dependants is of little or no value at all as in the case of State
employees and workers.
The Chairman of the Dong Nai provincial Labour Union, Huynh Tan Kiet, says they will be those to suffer most.
Vo Van Vo, a taxpayer from the healthcare centre in HCM City, says
that the proposed level for individual income tax payment sounds
reasonable on paper but will not be practical when it is applied as
“When I have to pay my income tax too much, I am not sure to make ado with what’s left from my earnings,” Vo explains.
Dao Thi Nham, a taxpayer from Hanoi, says the reduction level of
VND2.4 million per month for each family dependant is not enough to
keep pace with the rising costs of living.
“I have to spend approximately VND2.5 million per month for school
fees and tuitions, not to mention other spendings.” Nham says.
In fact, there remains a loophole in the personal income tax policy
as the collection of taxes from higher income earners such as farm
managers and small traders is without foundation.
Many experts maintain that personnel income tax payment must be
based on the living situation of people, including millions of workers
who are still under difficult circumstances.
While taxation agencies have failed to get full tax payment from
high-income earners due to unreasonable regulations, it is unfair to
focus on middle-income earners such as State employees and workers.
Pham Minh Thanh, Deputy Director of the Dong Nai provincial Social
Insurance Department, says the adjustment in personnel income tax
payment will have no impact on social welfare as workers still find
themselves in a difficult position to scrape out a living. VND4 million
is not enough for them in the face of price hikes.
So, the late application of such adjustment will not be worth the effort.