VAFI's golden proposal

September 21, 2011 | 15:34

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The Vietnam Association of Financial Investors (VAFI) wants the government to set a 10 per cent value added tax (VAT) on gold trading.

>> Gold speeds up on rising demand

>> Central bank licenses new gold imports

VAFI said that countries’ experiences showed that trading of gold bullion and jewelery must be hit with a 10-15 per cent VAT rate on its selling price, especially in Russia with the application of special consumption tax of 20 per cent on gold.

In other countries, gold bullion is not allowed to freely be traded due to high tax rate.

Meanwhile in Vietnam, gold bullion could be freely traded and does not face taxes, said VAFI.

"Imposing a 10 per cent VAT rate on gold trading will help Vietnam keep the gold market from manipulation and speculation," VAFI said. Currently, money pumped into gold trading is dead capital as it is not directed to production.

The Ministry of Finance (MoF) also collected opinions from relevant ministries on the possible VAT imposition on credit institutions. According to the draft circular, trading of gold, jewelry and foreign currencies will be likely subject a 10 per cent VAT rate.

The State Bank has just licenced 10 banks and gold trading companies to import a total of four tonnes of gold.

The Sai Gon Jewelry Company, the country's largest gold trader, was allowed to import 700 kilos of gold, while Phu Nhuan Jewelery Company gets 500 kilos.

It is the third time that the central bank has authorised gold trading companies to import gold since last month to help bring down soaring domestic prices.

By Nguyen Trang

vir.com.vn

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