The government will seek approval at the National Assembly's upcoming session to grant tax breaks to low income people as well as stock investors through the end of 2012.
Deputy Finance Minister Do Hoang Anh Tuan confirmed the decision at a press briefing late last week.
The Ministry of Finance had proposed suspending tax collection from those with a monthly income of less than VND9 million (US$440). This group currently pays a 5 percent income tax after claiming a personal deduction of VND4 million per month.
The proposal also includes a capital gains tax suspension for stock investors. According to the ministry, many investors have incurred losses over the past two years because the market has declined.
The ministry estimated that the total amount of tax payments suspended would be around VND3 trillion ($145.9 million).
Deputy Minister Tuan said the tax relief would be "the most practical" support for taxpayers amidst soaring consumer prices.
Inflation accelerated 20.82 percent in June from a year earlier, the fastest pace since November 2008, according to the General Statistics Office.