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Capital gains tax on stocks may be straw that breaks camel’s back
Some securities companies warn that the capital gains tax proposed to be introduced from January next year is too much too soon considering the gloom on the stock market.
The new Personal Income Tax Law requires investors to pay either 0.1 percent of every sale or 20 percent on the year’s net profit accumulated throughout the year.
Lam Minh Chanh, general director of Dai Viet Securities Company, said the rate was too high in both instances.
For instance, businesses with a net profit of below VND60 million(US$3,570) per year pay much less tax, he pointed out. Proprietary businesses pay just 5 percent.
Besides, many countries have a progressive tax structure for capital gains but Vietnam does not, he said.
Nguyen Ho Nam, general director of Sacombank Securities Company, said most investors would choose the 0.1 percent tax rate out of convenience.
In a recent circular, the Ministry of Finance said stock market investors who opt for the 20 percent annual rate would have to register with the tax office that monitors their securities company or the one near their residence.
For 2009 they can register in the first quarter, but from 2010 they have to register before December 31 the previous year.
But even if they choose to pay the 20 percent tax, they have to pay the 0.1 percent rate along with every transaction and claim refunds, if any.
Securities companies are responsible for deducting the tax. Monday, Vietnam’s main stock index, the VN-Index, fell 4.59 percent to close at 329.28 points, a low for this year.
Many securities firms and investors said delaying introduction of the capital gains tax could help the market rebound.
Thanhnien
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