Growing resistance to gold taxes in Vietnam

The Vietnamese government’s attempt to tighten their control over the domestic gold market is facing growing resistance. The government has recently introduced gold export quotas and export taxes of 10 percent on gold jewellery with a purity of 99.9 percent. The State Bank of Vietnam also plans to extend the taxation on jewellery with a gold purity of more than 80 percent.

According to Vietnamese media, the Vietnam Gold Trader Association is vehemently opposing the central bank’s plan to extend the export tax to gold jewellery with a purity of more than 80 percent. Domestic traders are upset with this plan, on the grounds that it will lead to big reductions in gold exports. Gold traders are warning the government that new export taxes will simply lead to a boom in black-market exports.

Some gold traders are attempting to reduce the gold content of some of their products to less than 99 percent in order to avoid existing taxes. Since most gold export traders operate on extremely weak margins, they are being forced to take such measures. Data show that Vietnam’s gold exports reached a total value of $1.2 billion in the first half of the year and thus contributed to reducing the country’s enormous trade deficit. Any reduction in gold exports will cause the Vietnamese trade deficit to widen again.

Vietnam’s gold price continued its rally in the last trading week and closed above 40 million dong per tael for the first time in history. In the slipstream of the world market, the domestic gold price reached a new all-time high of 40.1 million dong ($1,950) per tael (1.21 ounces).

http://www.goldmoney.com/gold-research/growing-resistance-to-gold-taxes-in-vietnam.html

Tags: vietnam gold, Vietnam gold market, Vietnam gold prices

Posted by VBN on Aug 5 2011. Filed under Gold. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry