The Ministry of Justice said that a number of provisions of the PIT law were outdated and no longer suitable in the current domestic and international economic situations, such as issues related to taxable income, tax-exempt income, tax calculation basis, method of determining taxable amount and progressive tariffs.
The law also had some gaps in dealing with new tax issues arising from the process of international economic integration and the emergence of new business models.
A notable proposal is that Vietnam could consider reducing the number of levels of tax rates in the partially progressive tariff from 7 to 5 together with widening the gaps of taxable income for each bracket to ensure that more tax was collected on people with taxable income at higher grades.
Currently, Vietnam applied seven tax rates at 5% to 35% for monthly taxable income from up to 5 million VND to over 80 million VND.