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Investors begging for delay of PIT law implementation
Securities investors have complained that the collection of personal income tax (PIT) as of January 1, 2009 would lessen the attractiveness of the stock market.
The stock market has been falling since the beginning of the year, causing most investors losses.
Le Trong Nghia, an investor on International Royal Securities Company’s trading floor, complained that while state management agencies have not offered any solution to rescue the market, the taxation body still insists on collecting tax.
Dinh Quoc Dong, a securities investor at No 293/32/20 Tam Trinh street in Hoang Mai street, Hanoi, said the taxation body should forego collecting the tax as the money that would be collected would not be significant in the context of the gloomy market.
Under the tax law, investors can choose one of two tax payment methods: they either pay 0.1% of transaction value or 20% of the profit they get.
The websites of the HCM City Stock Exchange and Hanoi Securities Trading Centre show that the total value of stock and fund certificate transactions of the two bourses in 2007 was VND286,557bil, while the figure was VND170,072bil from January 1, 2008 to November 21, 2008.
If the tax is 0.1% of transaction value, then the tax sum would be VND170bil in 2008 (by November 21).
However, Dong said the real tax sum collected would be much lower than that figure, because many investors would choose to pay 20% of profit, which means that they wouldn’t have to pay taxes if they suffered losses.
Le Khanh Lam, Deputy General Director of DTL Auditing Company, has warned that the PIT collection would have a negative effect on investors.
Lam said that investors would invariably sell stocks out to stop losses and avoid tax in the time to come.
“With the continuous market falls, investors will likely leave the market for other investment channels,” Lam said.
Nghia, an investor, said that it would be better if relevant ministries reconsidered when to impose PIT on income from securities investments. If they cannot delay the PIT law’s implementation, they ought to impose the tax rate of 0% for a time to support the market, he said.
TBKTVN, DTCK
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