(Hanoi, 21st) Deloitte Vietnam released a report pointing out that Vietnam’s top personal income tax rate of 35% ranks among the highest in Southeast Asia, calling on the Vietnamese government to implement reforms to attract talent.
According to online media outlet “Vietnam Express,” Vietnam’s highest personal income tax rate differs from Thailand and the Philippines, and is much higher than Singapore’s 24%, and Malaysia and Myanmar’s 30%.
Vietnam’s Ministry of Finance recently proposed a revision plan for the “Personal Income Tax Law,” planning to reduce the current seven tax brackets to five, but maintain the top marginal tax rate at 35%. The Ministry intends to raise the income threshold for this rate from 80 million Vietnamese dong per month (about 12,778 ringgit) to 100 million Vietnamese dong (about 16,054 ringgit).
The Ministry of Finance states that a 35% top tax rate aligns with international levels, as Thailand, Indonesia, and the Philippines also set it at 35%, while China, South Korea, and Japan have maximum rates up to 45%.
Many analysts believe 35% is too high. Nguyen Thi Giang, KPMG Vietnam’s head of personal tax consulting, pointed out that Vietnam levies the highest rate on groups earning 10 times the per capita GDP, which is far lower than the thresholds of Thailand (20 times) and Indonesia (62 times). This means Vietnam’s upper-middle income class is already bearing the top tax rate.
KPMG recommends lowering the top rate from 35% to 30% to attract skilled workers and align with international practices.
Pham Huu Nghi, Deputy Dean of the School of Banking and Finance at National Economics University, suggests capping it at 25%, as this better matches Vietnam’s middle income level as well as economic growth and investment needs.
A survey conducted by “Vietnam Express” this August showed that 73% of respondents preferred a top tax rate between 20% and 25%.
According to online media outlet “Vietnam Express,” Vietnam’s highest personal income tax rate differs from Thailand and the Philippines, and is much higher than Singapore’s 24%, and Malaysia and Myanmar’s 30%.
Vietnam’s Ministry of Finance recently proposed a revision plan for the “Personal Income Tax Law,” planning to reduce the current seven tax brackets to five, but maintain the top marginal tax rate at 35%. The Ministry intends to raise the income threshold for this rate from 80 million Vietnamese dong per month (about 12,778 ringgit) to 100 million Vietnamese dong (about 16,054 ringgit).
The Ministry of Finance states that a 35% top tax rate aligns with international levels, as Thailand, Indonesia, and the Philippines also set it at 35%, while China, South Korea, and Japan have maximum rates up to 45%.
Many analysts believe 35% is too high. Nguyen Thi Giang, KPMG Vietnam’s head of personal tax consulting, pointed out that Vietnam levies the highest rate on groups earning 10 times the per capita GDP, which is far lower than the thresholds of Thailand (20 times) and Indonesia (62 times). This means Vietnam’s upper-middle income class is already bearing the top tax rate.
KPMG recommends lowering the top rate from 35% to 30% to attract skilled workers and align with international practices.
Pham Huu Nghi, Deputy Dean of the School of Banking and Finance at National Economics University, suggests capping it at 25%, as this better matches Vietnam’s middle income level as well as economic growth and investment needs.
A survey conducted by “Vietnam Express” this August showed that 73% of respondents preferred a top tax rate between 20% and 25%.