The Ministry of Finance has proposed the Government to revise the Law on Personal Income Tax (PIT) to increase the taxable income threshold and dependant deductions in accordance with the current economic situation.

The revision, expected to be approved by the National Assembly in 2014, is a move to improve living standards at a time when prices continue to rise as a result of the global financial crisis and recession.

The taxable income threshold is expected to increase from the current 4 million VND to 6 million VND (286 USD) per month while the dependant deductions will be from 1.6 million VND to 2.4 million VND (114 USD) each.

Speaking at a press conference held on March 9 in Hanoi, Deputy Head of the ministry's Tax Policies Department Nguyen Van Phung said the revision is suitable as it is researched and developed based on GDP growth, fluctuations in the consumption price index (CPI), the project on salary policy reform, sociological survey results conducted by the General Department of Statistics and references to international research and experiences.

According to Deputy Minister of Finance Vu Thi Mai, the revision will result in a deficit of about 8,150 billion VND (388 USD), which will not have a significant impact on the State budget.

The revision also cuts the highest tax level of 35 percent levied on monthly income of 80 million VND (3,809 USD) or more.

If the revision were approved by the National Assembly, the PIT bracket will maintain six tax levels. For example, people who earn a monthly taxable income of less than 5 million VND, the PIT rate is 5 percent; for income between 5 million VND and 10 million VND, the tax rate goes up to 10 percent. Monthly income from 52 million VND to 80 million VND is subject to the highest tax rate of 30 percent./.