Taxation: An effective regulatory tool

During a meeting on June 9, the State Bank of Vietnam (SBV) and economic experts discussed potential amendments to Decree No. 24/2012/ND-CP on gold trading management. Experts proposed utilizing taxes not only to generate income but also to influence consumer behavior, aiming to stabilize the domestic gold market.

This approach seeks to narrow the gap between domestic and international gold prices, in line with government directives. It aims to mitigate issues such as smuggling, tax evasion, and the illicit transfer of foreign currency abroad.

Prof. Dr. Hoang Van Cuong of the National Assembly's Finance and Budget Committee emphasized that both raw gold imports for jewelry and gold bars for exchange should be taxed.

Dr. Le Xuan Nghia, from the National Financial and Monetary Policy Advisory Council, agreed, noting that taxes are a more effective regulatory tool than administrative measures.

Dr. Truong Van Phuoc, Vice Chairman of the National Financial Supervision Committee, highlighted the necessity of regulating gold while respecting market freedoms. He asserted that taxation is essential for managing revenue sources, including real estate and gold.

Associate Professor Dr. Nguyen Thi Mui, a member of the National Financial and Monetary Policy Advisory Council, recommended that the State Bank encourage the Ministry of Finance to develop specific tax policies for gold. Such policies could curb speculative and hoarding behaviors, steering investors towards other investment channels and helping stabilize gold prices.

Applying taxes to the gold market would ensure fair trading practices and foster a healthier business environment. Currently, sectors like securities and real estate are subject to personal income tax, and similar measures should be considered for gold trading.

Dr. Nguyen Tri Hieu pointed out that taxing gold transactions could not only increase budget revenue but also reduce speculative profits during periods of high gold prices, thereby preventing market "goldenization."

Caution advised for gold buyers

Experts also cautioned the public about the risks associated with gold investments. Dr. Truong Van Phuoc noted that the State Bank of Vietnam's sale of gold to four state-owned banks and SJC Company has impacted prices, urging caution due to potential market volatility influenced by global economic factors.

He emphasized the importance of balancing gold availability with other essential goods, suggesting that people could still manage without gold but not without critical commodities like gasoline, fertilizer, or rice.

Associate Professor Dr. Nguyen Thi Mui advised caution in gold investments, recommending savings as a more stable option for those with limited surplus funds. She highlighted that while buying gold for familial or ceremonial purposes is reasonable, relying on gold for significant profit is not advisable.

Tuan Nguyen