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PIT will help ‘filter’ securities investors
Many investors may have felt they had “missed something” when it was announced that the personal income tax (PIT) would still go into effect on January 1, 2009 as previously planned, despite the stock market’s falls and investors’ pleadings for the delay of its implementation. Meanwhile, economists believe that the PIT will drive unprofessional investors away.
Hong Kien, an investor, said that he well knows that paying taxes is the duty and responsibility of investors and businessmen.
However, he said that policy makers should consider the specific conditions of the market when deciding whether or not to collect the PIT tax on earnings from investments. The stock market has fallen so deeply that 60% of investors have suffered losses. If the PIT implementation was delayed, this could encourage investors to stay with the stock market.
However, the new tax law will still go into effect on January 1. Therefore, investors will think carefully when making investment decisions, and will only make transactions when they can be sure about profit after paying transaction fees and taxes. Ha Thanh, an investor, said that public offerings in the time to come, therefore, would be operating at a disadvantage.
Economists have different viewpoints about whether the collection of taxes from securities investments should be delayed. Dinh The Hien, MA, said that the stock market needs comprehensive measures, not simply tax exemptions or reductions.
Hien said that the current market is overrun with ‘surfing’ investors, rather than long-term investors. Therefore, the demand will become thinner in the time to come in the context of the stock market’s falls. However, Hien affirmed that there will not be a massive flight of investors from the stock market just because they have to pay taxes.
Investment Analyst Director of Hoang Gia International Securities Company Bui Duc Thinh also said that he is not pessimistic about demand in the time to come. He said that the market received the information about the PIT law to be effective in early 2009 before, which has made the VN Index hover around 300 points since mid December. Thinh said that the market would not be shocked by the re-confirmation of the tax’s implementation.
Thinh said that the tax might force some investors to leave the market, but that these would be unprofessional investors, while professional investors, who have experience and undergone ups and downs, would stay. The securities tax will not prevent professional investors from earning money, but weed out the investors who cannot weather the severe market.
Thinh said that the market always presents opportunities for profit, and when the opportunities come, the 0.1% tax will not be significant.
Secretary General of the Vietnam Association of Financial Investors Nguyen Hoang Hai also said that when the government’s demand stimulus package shows its effects, this would help activate the national economy and the stock market would also benefit. At that time, there will be a lot of opportunities for investors.
VNE
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