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The Government would be vested with the authority to determine reduction based on family circumstances for personal income taxpayers and their dependants in alignment with the country’s socio-economic development in each period.
According to the MOF, family circumstance-based reduction should be tweaked in a more flexible fashion, taking into account consumer price fluctuations and the people’s improved living standards.
Also in order to alleviate tax burden on taxpayers, the MOF proposes adding some particular reduction bases such as expenses for healthcare, education and health insurance before calculating personal income tax amounts payable by taxpayers. Reduction levels should be calculated thoroughly so as to ensure fairness for taxpayers.
The MOF also plans to adjust the partially progressive tariff for individuals earning income from salaries or wages. Accordingly, it would consider reducing the number of tax grades and widening income differentials in each bracket, imposing higher rates on high-income earners.
In addition, the MOF recommends expanding the range of income exempted from personal income tax. Specifically, income generated from dividends of members of agricultural cooperatives or personal gains from transfer of emission reduction certificates would be exempt from personal income tax, which is expected to promote sustainable agriculture development and environmental protection efforts.
Personal income tax exemption would also be applied for pensions paid by voluntary pension funds and supplementary pension insurance funds, including also lump-sum withdrawals. Such proposal aims to help attract more participation in voluntary retirement programs to ensure financial preparedness for retirees.
By: VLLF
