New Personal and Family Deductions Applied in 2026: A Solution to Workers’ Spending Challenges
In the context of constantly escalating prices for goods and services, the financial pressure weighing on the shoulders of workers is undeniable. The current personal and family deduction levels, which have been applied since 2020, have gradually become outdated and no longer accurately reflect the actual cost of living in major cities. Therefore, information regarding the adjustment of New personal and family deductions applied in 2026 is becoming a focal point of public attention, promising to significantly lighten the financial burden for millions of taxpayers.
Amending the Law on Personal Income Tax (PIT) is an inevitable roadmap to ensure fairness and social welfare. According to the Government’s plan, the draft amended Law on PIT will be submitted to the National Assembly for consideration in 2025 and is expected to take effect from 2026. This is a strategic step aimed at alleviating the burden on the people, boosting domestic consumption, and adapting to global economic fluctuations.
Many economic experts believe that if the deduction level is raised reasonably, it will create a positive boost for the economy. When people’s disposable income increases, purchasing power will follow, thereby stimulating the development of production and services. Let’s explore the details of the forecasts and the roadmap for changes in this important policy.
Why do personal and family deduction levels need to change in 2026?
The current personal and family deduction levels (11 million VND for the individual taxpayer and 4.4 million VND for each dependent) have been maintained since July 2020. However, after more than 4 years, the economic context has changed significantly:
- High Consumer Price Index (CPI): Prices for food, fuel, electricity, water, and essential services have all risen sharply, making the 11 million VND level no longer sufficient to cover a basic life in cities like Hanoi or Ho Chi Minh City.
- Education and health care costs: Increases in tuition fees and medical service prices have caused the cost of nurturing dependents (children, elderly parents) to far exceed the figure of 4.4 million VND per month.
- Regional minimum wage increases: While the regional minimum wage is continuously adjusted upward, the tax deduction level remains stagnant, inadvertently causing many low-income workers to fall into the category of having to pay PIT.
What are the forecasted new personal and family deduction levels for 2026?
Although official figures are still under discussion and in the drafting process, based on proposals from associations and economic experts, the new deduction levels in 2026 may be adjusted according to the following scenarios:
1. Deduction level for the taxpayer
Many opinions suggest that the personal deduction should increase from 11 million VND to about 15 – 18 million VND/month. This increase is calculated based on economic growth rates and to compensate for inflation throughout the 2020-2026 period.
2. Deduction level for dependents
For dependents, the popular proposed level is from 6 million to 7.2 million VND/month (instead of the current 4.4 million VND). Raising this deduction is particularly important for families with young children in school or elderly parents requiring regular medical care.
Roadmap for implementing the amended Law on Personal Income Tax
For the New personal and family deductions applied in 2026 to come into effect, the legislative process will be carried out according to strict steps:
- 2024: The Ministry of Finance summarizes and evaluates the implementation of the current Law on PIT and collects opinions from ministries, sectors, and localities.
- 2025: Finalize the draft Law on PIT (amended) to submit to the Government and the National Assembly for approval during sessions within the year.
- 2026: The new law officially takes effect, applying the new personal and family deduction levels for the tax period starting from January 1, 2026.
Impact of new deduction levels on people’s lives
Adjusting the personal and family deduction levels upward is not merely a figure on paper; it brings direct and far-reaching impacts:
Increased real income for workers
With higher deductions, the amount of PIT payable will decrease, meaning the actual net amount received by workers each month will increase. This helps them have more resources to improve their quality of life.
Ensuring social fairness
The new tax policy will help more accurately classify those who need to pay tax. Those with incomes just enough to cover basic living costs will not be subject to tax, while those with high incomes will contribute more proportionately to the national budget.
Stimulating consumption, boosting the economy
When millions of taxpayers have a little extra money each month, the total demand of the economy will increase. This is particularly important during the economic recovery phase following global fluctuations, helping businesses sell goods more effectively.
What do taxpayers need to prepare for 2026?
Although there is still time to prepare before the new law applies, taxpayers should also note a few points to optimize their benefits:
- Update dependent information: Ensure that documents proving dependents (birth certificates, parents’ income confirmation…) are always ready and accurate so that the registration for deductions when the new law is issued can be quick.
- Closely follow legal news: Tax regulations often have detailed instructions on subjects and application conditions; capturing information promptly helps you not miss out on benefits.
- Use online tax calculation tools: When the new levels are announced, use software or spreadsheets to estimate your personal budget for 2026.
Conclusion
The application of New personal and family deductions applied in 2026 is a necessary and humane step by the State. It not only meets the aspirations of the majority of people but is also an effective macro-economic regulation tool. Regardless of the specific increase, we all have the right to expect a fairer tax policy that is closer to reality, helping workers feel secure in their contributions and in building a sustainable life.
Let’s look forward to official information from the National Assembly and the Government in the coming time to get the clearest view of your personal financial picture in the future.