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SSC suggests PIT delay, more room for foreign investors, assistance fund   2009-03-02 - VietNamNet,TBKTVN

The State Securities Commission (SSC) has suggested a series of solutions to support the stock market, including the personal income tax (PIT) delay and higher foreign ownership ratio in local companies.

 

SSC has proposed to delay the PIT collection from securities investments for another year or two

SSC has said that in the report of the solutions to the stock market development in 2009, the commission has proposed to delay the PIT collection from securities investments for another year or two.

 

The kinds of tax SSC has suggested to delay collecting includes the tax imposed on earnings, dividends and income from bonds.

 

The commission believes that the PIT collection should only be applied when the market becomes stabilized. It also said that the bonus shares given to shareholders should not be taxed in order to encourage re-investment.

 

Meanwhile, a representative from the Vietnam Association of Securities Business has suggested not collecting taxes for three or five years, while the taxation would be resumed only when the market recovers and has strong development. Removing the tax proves to be an effective measure to stimulate the market, which was applied in many countries. China, for example, has removed taxation on securities investments.

 

Besides the suggestion to delay PIT collection, Tran Thanh Tan, Chairman of the Vietnam Fund Management Club said that the Government should consider slashing taxes on the subject of the stock market, including listing companies, securities companies, fund management companies and investment institutions.

 

Nguyen Doan Hung, Deputy Chairman of SSC, said that the commission is considering setting up a stock market stabilizing fund with the capital contribution from domestic and foreign financial institutions.

 

The idea has been applauded by many experts and members of the stock market. Nguyen Thanh Ky, Secretary General of the Vietnam Association of Securities Business, said that the fund will help stabilize the demand.

 

Regarding the capital for the fund, Ky said that the state can put a part of the capital it collects from the equitisation of state owned enterprises into the fund. Besides, the fund can also expect the capital contribution from businesses and domestic and foreign investors.

 

Tan from the Vietnam Fund Management Club said that if the state management agencies agree in principle to the establishment of the fund, members of the club would be ready for joining the fund.

 

Once again, in a series of measures to stimulate the stock market, SSC has suggested raising the ceiling foreign ownership ratio from 30% to 35% in order to increase the attractiveness of Vietnam’s stocks in the context of investment decreases. Besides, it has also suggested that banks should be allowed to not seek permission from the State Bank of Vietnam if they sell less than 5% of stakes to foreign banks.



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