Recently, the proposal to impose taxes on gold has resurfaced as domestic gold prices surged, widening the gap with global prices by around 20 million VND per tael (approximately USD 800). Currently, SJC gold bullion is selling for VND 152 million per tael (approximately USD 6,320).

The Vietnam Association of Financial Investors (VAFI) has recently proposed applying value-added tax (VAT) using the deduction method for physical gold trading activities.

VAFI recommends a 10% VAT on invoices for the sale of bullion and gold jewelry as a measure to stabilize the gold market.

In a draft amendment to the Personal Income Tax Law recently submitted to the National Assembly, the government proposed including income from the transfer of bullion gold in the taxable category.

The proposed personal income tax on bullion gold is 0.1% of the transfer value per transaction. The government will specify the implementation timeline, the taxable value threshold, and the appropriate tax rate adjustments aligned with its market management strategy.

Commenting on these tax proposals, financial-banking expert Dr. Nguyen Tri Hieu told VietNamNet that it would be fairer to tax profits rather than transaction values. This approach would align with international practices and treat gold like other assets.

However, he noted that taxing profits could be challenging for individuals who bought gold long ago or lack proof of the purchase price.

To address this, some suggest taxing the transaction value instead. But according to Dr. Hieu, this method is flawed, as the money used to buy gold may already have been taxed as income from salaries or business activities. Imposing additional taxes on the transaction could lead to "double taxation."

He emphasized that people often buy gold to accumulate wealth, for security, as a form of "insurance," or to pass it on to heirs. Therefore, taxing such transactions must be carefully considered.

Dr. Hieu also noted that tax policies should be consistent rather than used to regulate the market temporarily. However, he acknowledged that taxes could help stabilize the market in specific situations, such as during spikes in smuggling or speculation.

He believes taxation can influence investor behavior and help curb speculation and market manipulation.

“Still, gold market stability cannot rely on taxation alone. Tax is merely a fiscal policy tool, not a comprehensive market control measure. To stabilize the gold market, supply and demand must be balanced. If supply meets demand, the market will stabilize,” he stressed.

Economic expert Dinh Trong Thinh also supports taxing gold trading but stresses the importance of appropriate timing and tax levels.

“Gold is just another commodity. Any tax imposed on gold should be a one-time tax to avoid double taxation,” he said.

Points to consider when taxing gold

At a recent press conference, Mr. Shaokai Fan, Regional Director for Asia-Pacific (excluding China) and Director of Central Banks at the World Gold Council, said that any tax solution for gold in Vietnam should meet two goals: minimizing speculation and avoiding a shift from official markets to the black market to evade taxes.

“This situation has occurred in many countries. When gold is heavily taxed, people tend to turn to black markets, which would backfire and contradict Vietnam’s goal of liberalizing its gold market,” Mr. Fan cautioned.

He also highlighted the cross-border implications of taxation. Significant differences in gold taxes between Vietnam and its neighbors could create a natural flow of gold across borders. For example, countries like Singapore, Hong Kong (China), and Malaysia do not tax gold. If Vietnam imposes taxes, it may encourage cross-border smuggling. This is a factor Vietnam must carefully consider.

Regarding gold market management, Vietnam is considering piloting a gold exchange. Mr. Fan emphasized the need to clearly define the primary goal of such an exchange. If it is to facilitate domestic gold market operations, then implementation would be beneficial.

“In the broader context, the Vietnamese government is aiming to develop Ho Chi Minh City into an international financial hub. If that is one of the objectives behind a centralized gold exchange, then significant reforms and market liberalization would be needed before such an exchange can become a reality,” he said.

In terms of gold market liberalization, Mr. Fan cited China’s gold exchange as an interesting model.

China’s market is enormous and structurally unique, operating as a tightly controlled, closed system. The country strictly regulates gold imports and exports, primarily to serve domestic market needs and manage the spread between domestic and international gold prices.

He noted that if Vietnam wants to adopt a controlled market model, the Chinese approach might be suitable. However, for a long-term strategy of becoming an international financial center, Vietnam should consider a more open and liberalized model tailored to its market characteristics.

Nguyen Le