HÀ NỘI — The Cần Thơ City People’s Committee has proposed changes to the current personal income tax (PIT) exemption on bank savings interest. The proposal suggests that only low amounts of savings should be exempt from PIT, rather than all individual bank savings as is currently the case.
This recommendation was submitted in response to the Ministry of Finance’s draft Law on Personal Income Tax. Under existing regulations, individuals are exempt from PIT on interest earned from deposits at credit institutions and foreign bank branches. In contrast, companies are required to pay tax on their interest income from bank deposits.
As of November 2024, data from the State Bank of Vietnam (SBV) showed that individual deposits in banks exceeded VNĐ7 quadrillion, an all-time high and a 7.16 percent increase compared to the end of 2023. In November 2024 alone, individuals deposited an additional VNĐ22.14 trillion into the banking system.
The Ministry of Finance (MoF) has also received comments on the draft law from other ministries and agencies. The Ministry of National Defence has proposed tax exemptions for income generated from scientific tasks related to the development of equipment for national defense and security, with the aim of attracting a skilled workforce to this field. The Ministry of Justice has suggested PIT exemptions for highly qualified workers in various sectors and the ability for the Prime Minister to approve tax exemptions or reductions for employees at certain international organizations.
The Ministry of Agriculture and Rural Development has recommended a PIT exemption for income from dividends earned by members of agricultural cooperatives and farmers who participate in the Large Field program, as well as those engaged in afforestation and aquaculture production.
In addition to these proposals, several ministries and localities have called for PIT reductions for individuals and families impacted by natural disasters, such as storms and floods.
The MoF has responded to these proposals by emphasizing the need to restructure the State budget to ensure a sustainable financial system. This includes expanding the tax base and minimizing the integration of social policies into the tax system. The MoF noted that any amendments to tax exemptions or reductions must align with current policies and international tax reform trends.
The Government plans to submit the draft Law on Personal Income Tax to the National Assembly for review at a meeting later this year, with the goal of passing the law in May 2026. — VNS
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