11-21-08 4:29 AM EST
HANOI -(Dow Jones)- Vietnam will need to introduce a new tax on stock investors from 2009 as planned to avoid complaints from other tax payers, the General Department of Taxation said in a statement issued Friday.
The new tax law will require stock investors to choose to either pay 20% tax on capital gains chalked up for the year, or pay 0.1% tax on the transaction value of every sale they make, even if they’re making a loss on the sale.
“There are calls asking to temporarily suspend the new tax law in 2009…but delaying it is absolutely unnecessary,” said the department, which is under the Ministry of Finance.
The new tax is expected to help raise between VND200 billion ($12 million) and VND300 billion, equivalent to a tiny proportion of the total state budget of VND400 trillion for 2009, the statement said. Therefore, delaying its introduction wouldn’t hurt the state’s budget.
However, if the government delayed it, tax payers in other categories would also ask for a review of their tax obligations, causing complications in the tax collecting process, it noted.
“It’s unfair if stock investors, who are seen as high-income earners, are exempt from paying tax, while millions of others including business people and civil servants are still contributing to the state budget,” it added.
Vietnam’s stock market, which was launched in July 2007, has fallen 67% compared with a year ago. It ended off 2.1% at 318.96 Friday after a Finance Ministry official said Thursday that the authority will apply the tax law from Jan. 1.
-By Nguyen Pham Muoi, Dow Jones Newswires, 84-913-220-614; phammuoi.nguyen@ dowjones.com