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Investors want securities tax reduced
Dividend and securities transfer taxes should be removed to encourage investors and help the stock market develop, said Viet Nam Association of Financial Investors.
Association General Secretary Nguyen Hoang Hai said only 30 per cent of idle cash from citizens had flowed into the domestic banks and securities markets compared to 100 per cent in other countries.
Low supply and high demand had caused domestic bank deposit and lending interest rates to soar much higher than in other countries in the region, Hai said.
To attract the entire idle cash from society to flow into the banking system and the securities market, investors should be given securities transfer tax exemption," he said.
When the market was stable and healthy, enterprises found it easier to lure capital, thereby reducing loan burdens from commercial banks.
Also, gold bar trading should be restrained by only allowing citizens to possess or sell through authorised agents assigned by the central bank, Hai said. Citizens should not be allowed to buy gold bullion.
A property tax should be imposed in order to limit real estate speculation, he said. Such a tax would need to be implemented gradually when the property market heated up, with better liquidity.
Anti-dollarisation methods should continue, he said.
On the issue of a dividend tax, Hai said securities was considered one of the most risky investment fields, at least riskier than a fixed deposit in a bank. In many countries, deposits in banks were insured against a bank going bankrupt.
However, when a company went into liquidation, securities investors could lose their money.
In Viet Nam, personal income tax was not impose on a depositor's interest because the State wanted to encourage citizens to deposit their idle money, Hai said.
However, there was a tax on dividends, which was unreasonable because investors have recently been receiving much higher interest from deposits than dividends.
Last week, the Government submitted to the National Assembly a proposal on tax reduction, extension and exemption from August 1 to the end of 2012. The proposal would be brought to the next Assembly session for approval.
Over past months, the domestic stock market has been faced with many difficulties, causing the VN Index to decline by 20 per cent over the end of last year. In reality, most shares had decreased 30-60 per cent over the last few months.
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