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Too early to tax gold investors?   2009-12-22 - VietNamNet/DT

Whilst analysts have admitted that it is reasonable to impose tax on the profit investors gain from their investment deals, they also said that now is not the right time to begin imposing tax.


The Ministry of Finance is attempting to tax the profits of investors 20 percent. Two methods of tax collection have been proposed.


In the first one, gold investors temporarily pay 0.002 percent on the purchase prices, no matter whether they make profit or loss. At year’s end, investors will make tax finalization at customs agencies and pay 20 percent on taxable income.


In the second option, if the gold trading floors can calculate profits and losses from each transaction, gold investors will have to pay 20 percent of the income they get from profitable transactions. In case gold trading floors cannot calculate profit and loss, gold investors will temporarily pay 0.1 percent of the sale price. At year’s end, gold investors will make a tax finalization at customs agencies and pay 20 percent on their taxable income.


While gold investors seem to be happy with the tentative taxation, because this means that gold trading floors will be allowed to exist instead of having to be shut down as threatened previously by the State Bank of Vietnam, analysts believe that it is unfair for investors to impose the tax right now.


The general director of a company which is running a gold trading floor in HCM City said that most of transactions have not brought great profits to investors. Therefore, the taxation would not encourage investors to investment more.


The general director has recalled the intentions by the State Bank of Vietnam to either close gold exchanges or set high collateral equal to 100 percent of their investment. He said that in both cases, the regulations will mean gold exchanges will  shut down.


The deputy general director of ACBs gold trading transaction centre, Huynh Duy Sang, said that it is quite normal to tax on profits from investments, including gold investments. However, Sang said that it is necessary to choose a suitable moment to tax, while gold investment remains a new investment channel in Vietnam


Nguyen Ngoc Que Chi, general director of Sacombanks Gold, Silver and Gemstone Company, said that it would cause difficulties to gold trading floors if it is stipulated that the tax finalization will be carried out once at the year’s end.


Therefore, Chi said that it would be better to carry out tax finalization monthly, which will be more convenient to investors, while helping reduce pressure on gold trading floors which are in charge of withholding tax from gold investors.


In fact, some taxation agencies have admitted that most of enterprises in this field have just become operational which have limited numbers of clients and small revenue as commissions for brokerage. The enterprises now have to pay business practice rates, value added tax and corporate income tax already. Therefore, it seems to be too early to think about taxing gold investors right now.

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