Vietnam income tax threshold to rise to $432

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The new threshold for personal income tax has been more than doubled from VND4 million (US$192) per month to VND9 million, and is expected to be approved by the National Assembly next month.

At a sitting Tuesday the NA's Finance and Budget Committee also agreed with the government's recommendation to allow a personal exemption of VND3.6 million ($171) for each dependent, up from the current VND1.6 million.

The number of dependents will not be limited to two as the committee had proposed earlier.

All the committee's earlier recommendations had come under fire for being "shocking" and "disappointing." The committee had also wanted the tax threshold set at VND7 million and personal exemption per dependent at VND2.8 million.

The committee explained that it had been concerned about sustaining government revenues.

But even members of other NA committees panned the proposals as "illogical" and "unacceptable."

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The changes, if approved by the house, are expected to take effect next July.

The Ministry of Finance estimates loss of revenues at VND5.2 trillion ($247.36 million) next year, and VND13.35 trillion in 2014.

If prices increase by more than 20 percent by the time the changes take effect, the government will propose fresh adjustments to the committee. 

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