The family deduction threshold for calculating personal income tax (PIT) could be adjusted during the 50th session of the National Assembly Standing Committee in October 2025, provided there is a significant change in the Consumer Price Index (CPI).

Family deduction linked to CPI fluctuations

The Ministry of Finance is proposing a comprehensive amendment to the Personal Income Tax Law, covering seven key areas including taxable income, tax-exempt income, family deduction, tax brackets, and tax rates.

The draft law is expected to be presented for discussion at the National Assembly session in October 2025 and is slated for approval in May 2026.

However, concerns have been raised about the lengthy wait for these changes. The current family deduction threshold is putting financial pressure on taxpayers, especially in today’s challenging economic environment.

At a press conference on January 7, Truong Ba Tuan, Deputy Director of the Tax Management and Supervision Department at the Ministry of Finance, addressed these concerns.

Under the current Personal Income Tax Law, the government must report to the National Assembly to adjust the family deduction if the CPI increases by more than 20% compared to the last adjustment. Since 2020, the CPI has risen by nearly 16% but has not exceeded the 20% threshold.

If the CPI experiences a significant increase in 2025, the issue of raising the family deduction threshold could be included in the agenda for the October 2025 session of the National Assembly Standing Committee.

Automated personal income tax refunds in 2025

At the same press conference, Mai Son, Deputy Director of the General Department of Taxation, announced plans to implement an automated personal income tax refund system starting in early 2025, applicable to the 2024 tax finalization period.

While the tax sector has previously incorporated information technology into the refund process, full automation - covering all steps from submission to payment - has not yet been achieved.

The new system aims to fully automate the process through the eTax Mobile platform, allowing taxpayers to monitor their tax obligations or refunds in real-time.

Additionally, tax authorities will compile data from relevant parties, generate a pre-filled tax declaration form, and send it to taxpayers for review. Taxpayers will then verify their income, deductions, and payments to confirm the final amount owed or refundable.

Refunds will be transferred directly to the bank accounts registered by taxpayers.

“Initially, the automated refund process may face some challenges. Tax authorities must ensure comprehensive data integration, including sources of income, deductions, and charitable contributions, to establish a robust system,” Son explained.

Binh Minh