New information on personal income tax thresholds for individuals

At a press briefing during the Finance Ministry’s first-quarter press conference on April 9, 2026, Deputy Director Luu Duc Huy of the Tax Administration, Policies and Fees Oversight (Ministry of Finance) stated that the draft decree detailing the Personal Income Tax Law, with proposed additional deductions for medical and education expenses, is under broad public consultation. The draft was circulated on March 26, 2026 to gather input from ministries, agencies, localities, associations and related organizations, and is publicly available on electronic portals for societal comments. If approved by the National Assembly, the new policy is expected to take effect on July 1, 2026. A core provision of the draft is to add deductions for two areas tied to citizens’ lives: medical costs and education. Two concrete options are proposed. Option 1 would set medical deduction at about 20 million VND/year and education deduction at about 21 million VND/year (total 41 million VND/year). Option 2 would increase to 23 million VND for medical and 24 million VND for education. These amounts are based on actual expenditure data. In 2024, average medical spending per person per year was about 3.5 million VND for outpatient care and 10–12 million VND for inpatient care; education and training spending averaged about 9.6 million VND per person per year. Assuming an average dependent ratio of about 0.8 per taxpayer, total health- and education-related costs for taxpayers and dependents are estimated at about 20.4 million VND/year (health) and 19.2 million VND/year (education). The proposed deductions are designed to exceed actual spending to provide room for support. Analysis by the Finance Ministry indicates the impact of Option 1 would be roughly 2x the outpatient medical expenditure and about 2.2x the average annual education expenditure in 2024, signaling a policy not only aligned with reality but also with a safety margin. The current dependent deduction already includes a portion of basic living costs, including health and education; however, a separate additional deduction would provide further support, calculated based on specific data to reflect practicality. Regarding the budget impact, applying Option 2 is estimated to reduce revenue by more than 7,600 billion VND. Nevertheless, the policy would lower taxpayers’ obligations. Calculations indicate that an individual earning about 28 million VND per month with a dependent may not owe personal income tax. Tax would only arise if income exceeds about 28.63 million VND per month, with the excess taxed at the 5% rate in the lowest bracket. The policy direction aims to ease tax pressure by increasing deductions, thereby supporting citizens and ensuring social security. On feasibility, especially the invoicing requirements for medical and educational expenses, the Finance Ministry notes that implementation will comply with tax management laws. Under current rules, deductions require proper invoices and documents; with electronic invoicing, businesses with revenue of 1 billion VND or more must issue invoices. For health and education—regulated sectors—invoice/document requirements will be enforced. Tax authorities will consider legitimate receipts for deduction; violations may be penalized. "The options are still under consultation and refinement. The Ministry will collect feedback and adjust the draft to ensure that upon enactment the policy both supports citizens and aligns with budget balance. The reform to increase deductions for health and education is expected to bolster social welfare and provide a basis for development," a Finance Ministry representative said. From July 1, changes related to studying and driving test procedures will also be clarified for citizens.