Vietnam will still impose the 20 per cent capital gains tax on stock investments from 2009 as planned, Vu Van Truong, head of the Ministry of Finance's tax policy department confirmed, refuting rumors that the new law will be delayed to early 2010.
"The ministry had collected opinions to report the government, which gave no indication of delaying it during the national assembly’s recent session, therefore, the law will be taken into effect," Truong said.
"Lawmakers also discussed this issue, however, no changes have been made," Truong added.
The tax will have bad impact on the stock market, which is slumping and showing no signs of recovery near term, analysts noted.
"It is not the right time to tax, which will dissuade investors to take part in," Truong Duy Khiem, a stock chief analyst of ACB's Securities said.
"I have no idea when the market will recover, and local firms will be negatively impacted by the global recession. Complicated tax payment registration procedures and taxation will concern newcomers, and of course the government plans to sell shares in state-owned enterprises from now to 2010 will be hurt, Khiem analyzed.
A number of stock brokerages forecast new cash inflows will heat up the market as Vietnam is pressured to further cut benchmark rates in tandem with central banks of countries around the world in the face of the global financial tsunami.
State coffer is forecast to keep thinning as the government is pressured to cut export tax to boost exports leading to the deficit, analysts added. Next year, state deficit will account for 4.82 per cent of the country's GDP value.
So far, most of institutional investors have posted loss of more than 60 per cent.
VN-Index has lost more than 63 per cent so far this year, being the world's second worst player behind China.
Market capitalization value of 316 listed firms on HOSE and HASTC dropped to US$12.5 billion as of Oct down from US$20 billion a year ago. (Saigon Economic Times)
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