Share trading income may be taxed

Vietnam may tax revenues from trading shares to help cool its fast expanding stock market, state media quoted Finance Minister Vu Van Ninh on Tuesday as saying.
The tax would target mainly income from short-term investments and "to limit and control credit being shifted to investing in stocks", the Saigon Giai Phong newspaper quoted Ninh as telling a National Assembly meeting.

Vietnam's share index, VN-Index, has risen more than 50% so far this year. The rise has drawn more investors into the $16 billion exchange and expanded trade in unofficial markets.
Financial experts say a tax would be a better approach than introducing capital or currency controls on the stock market, as proposed by the central bank, which would scare off foreign investors and lead to a market fall.

Last week, Prime Minister Nguyen Tan Dung said Vietnam would tighten market inspections only to reinforce regulations but would not apply any urgent measures to control foreign capital.
Ninh told the meeting of the Assembly's Standing Committee on Monday Vietnam would "gradually narrow the unofficial markets to minimise chain-impact risk caused by the overheated market expansion", the Saigon Giai Phong reported.

A Vietnamese investor said news on the Finance Ministry's intention to impose income tax would not have any immediate impact on the market.
Financial experts say a tax would be a better approach than introducing capital or currency controls on the stock market, as proposed by the central bank, which would scare off foreign investors and lead to a market fall.

Last week, Prime Minister Nguyen Tan Dung said Vietnam would tighten market inspections only to reinforce regulations but would not apply any urgent measures to control foreign capital.
Ninh told the meeting of the Assembly's Standing Committee on Monday Vietnam would "gradually narrow the unofficial markets to minimise chain-impact risk caused by the overheated market expansion", the Saigon Giai Phong reported.
A Vietnamese investor said news on the Finance Ministry's intention to impose income tax would not have any immediate impact on the market.

"A part of the public has given up public work and spent time on investing in shares," the newspaper quoted deputy head of the Assembly's Economic and Budget Committee Tao Huu Phung as saying.

While offices of stock broking firms in Hanoi and Ho Chi Minh City have been packed by investors in the past several months, the central bank banned its officials from share trading during working hours early last month.

Source: Reuters