|
Securities companies petition against unfair tax scheme
On February 26, dozens of newly etablished securities companies signed a petition requesting the Prime Minister and Ministry of Finance provide them with corporate income tax incentives.
The problem lies in that under the newly promulgated document by the Ministry of Finance (Circular 134 dated November 23, 2007), the securities companies, which were set up after October 25, 2006, cannot enjoy corporate income incentives like those set up before that time.
The Ministry of Finance (MOF) might think tax incentives should be applied only while the stock market is fledgling and it is no longer necessary to encourage the establishment of securities companies with tax incentives.
The newly established securities companies believe that the decision to remove the tax incentives is discriminatory treatment.
Nguyen Thi Minh Tam, Finance and Administration Director of Saigon – Hanoi Securities Company (SHS), said the removal of tax incentives puts the companies in a difficult situation.
As late comers to the market, the new companies have to make heavy investment in technologies and the labor force. Meanwhile, other companies have many more advantages, as they entered the market earlier and are benefited by incentives.
“The stock market is still young and unstable. The Ministry of Finance is wrong if it only looks at the market’s initial boom and concludes that securities companies do not need tax incentives any more,” Tam said.
Regarding the legitimacy of the decision on removing the tax incentive scheme, analysts have pointed out that a legal document must not be retroactive, thereby giving an unfair advantage to those who entered the market early while other competitors suffer the natural growth of this economic partition.
Nguyen Anh Tuan, General Director of Sao Viet Securities Company, said this is a policy risk and businesses have to bear the consequences of this risk.
Tuan said that in case the Government finds it necessary to remove the tax incentive scheme, it needs to inform businesses of this decision in advance.
“Investors might have drawn up business plans before the decision was made to set up securities companies, thinking they would enjoy the incentives,” Tuan said.
In the petition to the Prime Minister and Ministry of Finance, securities companies wrote that they had not been informed about the tax incentive amendment before. They stressed that the State should maintain the corporate income tax incentive scheme in order to support securities companies’ development in the context of the stock market slump.
Ha Huy Tuan, Director of the Tax Policy Department under the Ministry of Finance, confirmed that his department has received a proposal from the Vietnam Securities Business Association about the issue.
Tuan said that some of the arguments are reasonable, and his department will discuss the issue and make a report to the ministry for a final decision.
It is estimated that 70 securities companies are facing difficulties because they are not eligible for incentives.
The securities companies established prior to October 25, 2006 are eligible for a tax exemption for the first two years of operation, 10% tax in the next three years of operation, and 20% in the next five years.
VNN
|
