A gold tax is necessary, but it is necessary to take into account what has happened in many countries.

Taxation of gold is necessary, however, consideration should be given to when and how much to impose it, and what has happened in many countries.

How to tax gold?

Recently, the proposal to tax gold has been continuously raised in the context of the sharp increase in domestic gold prices and the widening gap with the world by about 20 million VND/tael. Currently, the selling price of SJC gold bars is at 152 million VND/tael.

Recently, the Vietnam Association of Financial Investors (VAFI) proposed applying value added tax under the deduction method to physical gold trading activities.

VAFI proposed a measure to help stabilize the gold market by applying 10% value added tax on sales invoices for gold bars and gold jewelry.

In the draft revised Law on Personal Income Tax recently submitted to the National Assembly , the Government proposed to add provisions on income from gold bar transfer to the taxable area.

The personal income tax rate for gold bars is expected to be 0.1% of the transfer price each time. The Government will specify the time of application, the taxable value threshold of gold bars and adjust the tax rate in accordance with the roadmap for gold market management.

Regarding the proposals to tax gold, sharing with VietNamNet reporter, Dr. Nguyen Tri Hieu, a finance and banking expert, expressed his opinion that it is best to tax profits, not transaction values, which would be fair and equal to other types of assets, and at the same time consistent with international practices.

However, according to him, in cases where many people bought gold a long time ago or did not have evidence of input prices, taxing on profits would be difficult.

To solve this problem, some opinions propose to tax on the transaction value. According to Mr. Hieu, taxing in this way is not appropriate, because the amount of money people use to buy gold may actually be after-tax income from salary or business. If we continue to tax on the transaction value, it will easily lead to a situation of "tax on tax".

Experts say that taxing gold trading is necessary, but it is necessary to consider when to apply it. Photo: Minh Hien

He believes that people buying gold to save, protect themselves, or as a type of "insurance", or for inheritance... if taxed, needs to be carefully considered.

According to Dr. Nguyen Tri Hieu, if it is a tax policy, it should be applied regularly, not using tax to stabilize the market at a certain time or stage. However, imposing tax can also contribute to stabilizing the gold market in each stage, such as when there are many smuggling and speculative activities.

He said that taxation can affect investor behavior and somewhat limit speculation and market manipulation.

“However, stabilizing the gold market cannot rely on taxation. Taxation is only a tool of fiscal policy, not an effective measure to stabilize the market. To stabilize the gold market, it is necessary to ensure a balance between supply and demand; if supply meets demand, the market will stabilize,” Mr. Hieu emphasized.

Economist Dinh Trong Thinh also said that taxing gold trading is necessary, but it is necessary to consider when to apply it and what the tax rate should be.

“Gold is just a normal commodity, taxing gold should only be done once, avoiding double taxation,” he said.

Notes on gold taxation

Sharing at a recent press conference, Mr. Shaokai Fan, Director of Asia-Pacific region (excluding China) and Director of Global Central Banks at the World Gold Council, said that any gold tax solution in Vietnam should be designed to meet two goals: minimizing speculation and avoiding the phenomenon of people switching from transactions in the official market to the unofficial (black market) to "avoid" taxes.

“This situation has happened in many countries. When high taxes are imposed on gold, people will turn to the black market to trade, which will be counterproductive and contrary to the direction of liberalizing the gold market in Vietnam,” Mr. Shaokai Fan noted.

Along with that, the representative of the World Gold Council also mentioned the impact of taxes on gold in the relationship between Vietnam and neighboring countries. When there is a difference in taxes, it will create a natural flow. For example, in Singapore, Hong Kong (China), Malaysia... there is no tax on gold, but if Vietnam imposes taxes, it can cause gold to flow across borders from one country to another. This is a point that Vietnam needs to consider.

Regarding the management of the gold market, Vietnam is considering piloting a gold trading floor. Mr. Shaokai Fan said that it is important for Vietnam to clearly define the ultimate and important purpose of establishing a centralized gold trading floor. If it is to facilitate the operation of the domestic gold market, it should be implemented.

“In a more general context, the Vietnamese government is aiming for Ho Chi Minh City to become an international financial center. If that is one of the goals of launching a centralized gold exchange, I think it will take a lot of reforms and moves to liberalize the gold market before such a gold exchange becomes a reality,” said Mr. Shaokai Fan.

In the liberalization of the gold market, Mr. Shaokai Fan assessed that a gold exchange like China is a quite interesting model.

The Chinese market is too large, and its market structure is very unique, a closed, controlled system. China strictly controls the import and export of gold, mainly to serve the domestic market demand and control the difference between domestic and international prices.

He believes that if Vietnam wants to follow such a market control direction, the Chinese model may be suitable. However, if Vietnam wants to build an international financial center in the long term, a more liberal and open model should be considered and adjusted to suit the Vietnamese market.

Will the gold price drop to the range of 100-110 million VND/tael from now until the end of the year? The demand for gold at the end of the year is always high due to the wedding and Tet holiday season, while many investors are still waiting for price adjustments to buy. Will the gold price drop to 100 million VND/tael from now until the end of the year?

Source: https://vietnamnet.vn/ap-thue-vang-la-can-thiet-nhung-can-tinh-den-dieu-da-tung-xay-ra-o-nhieu-nuoc-2461873.html