Tax changes that might help rejuvenate the Vietnamese stock market were discussed at a conference in Hanoi on October 4.
“Security companies are a high risk when stock prices go down, so new regulations that allow for write-off of devalued stocks are necessary,” said the head of the State Securities Commission’s Market Development Department, Nguyen Son.
Securities companies are not currently able to enjoy the provisions of Ministry of Finance Circular No228/2009/TT-BTC on write-offs of inventories, losses of financial investments, bad debts and payments on warranties for goods and construction works.
“In the short term, the Ministry should entitle these firms to apply the regulations in the circular”, Son said.
The 10 percent tax rate applied to interest income of companies on foreign loans was also high in the context of weak capital markets, he said, particularly since a 5 percent rate was imposed on such income received by individuals.
The tax on all income of foreign investors should be reduced to 5 percent, which would create more favourable opportunities for Vietnamese enterprises to attract foreign investment, Son argued.
Many securities services should also be exempt from value added tax (VAT), including brokerage, underwriting, investment consulting, share custody, management of securities portfolios and margin trading, he suggested.