Personal income tax (PIT) is a financial obligation that anyone with taxable income must fulfil.But why do we have to pay personal income tax?This article will explain the four main reasons, helping you understand the significance of paying personal income tax and why it is an important responsibility.
1. Contributing to the development of the country
Personal income tax is one of the main sources of revenue for the state budget.This money is used for:
Building infrastructure such as roads, bridges, and schools.
Invest in healthcare, education, and public services.
Support social welfare programs, help those in need.
When you pay personal income tax, you are directly contributing to the sustainable development of Vietnam.
2. Ensure social justice
Personal income tax is calculated according to a progressive tax rate, meaning that those with higher incomes will pay a larger percentage. For example:
Taxable income below 11 million VND/month (for individuals without dependents) is usually exempt from tax.
An income of 50 million VND/month is subject to a tax rate of 25%-30%.
This mechanism helps reduce the wealth gap and distribute social resources more equitably.
3. Compliance with obligations and legal requirements
According to the Personal Income Tax Law in Vietnam, paying personal income tax is mandatory for all individuals with taxable income.If you evade taxes or fail to pay on time, you may:
Fined administratively from a few million to tens of millions of dong.
Facing legal troubles, affecting personal reputation.
Paying taxes according to regulations helps you avoid unnecessary risks.
4. Receive benefits from the government
Paying personal income tax brings many practical benefits, including:
Family deductions: 11 million VND/month for oneself and 4.4 million VND/month for each dependent.
Opportunity to receive a tax refund if overpaid.
Eligible to receive support policies from the government, such as social subsidies or financial incentives.
Understanding and Properly Paying Personal Income Tax
To file personal income tax effectively, you need:
Learn about tax exemptions such as mandatory insurance (social insurance 8%, health insurance 1.5%, unemployment insurance 1%) and family deductions.
Accurate income declaration, usually supported by the company if you are an employee.
Pay attention to the tax submission deadlines (monthly, quarterly, or annually) to avoid penalties.
If you need assistance, H&P Group offers professional personal income tax consulting services, updated according to the latest circulars, helping you comply with regulations and optimise costs.
Paying personal income tax is not only a legal obligation but also a way for you to contribute to the development of the country and a fairer society.Understanding the reasons for paying personal income tax helps you fulfil this responsibility voluntarily and effectively.
Contact H&P Group now for free consultation on personal income tax, accounting, and legal matters according to the latest regulations!
