Gold should be considered a product

Gold should be considered a product that requires intervention to ensure that the market operates transparently and is connected to the world.

Recently, the State Bank of Vietnam (SBV) proposed that the Finance Ministry increase the tax rate on gold. A VOVNews reporter interviewed economist Vu Dinh Anh about the import and export of gold.

Reporter: Do you think that imposing higher taxes on gold exports is the best solution at the moment?

Dr. Vu Dinh Anh: This is good news for trade fraud. The Ministry of Finance has imposed a 10-percent tax rate on gold bars, while gold jewelry enjoyed zero taxes. As a result, local businesses simply cast gold in other forms, such as coins and ashtrays, to avoid the tax.

At present, local businesses need certificates to import gold while suffering high tax rates to export it. They are seeking ways to export gold without paying taxes.

Reporter: What is your assessment of this problem?

Dr. Vu Dinh Anh: The most important thing for the current gold market is that businesses should be allowed to trade gold freely. We can put gold on the list of import-export goods to allow a capital flow.

Classified as goods, gold can be put into the balance of trade like jewelry for import and export, which can create a flow of capital. Otherwise, gold is seen as a type of currency. In fact, businesses always have their own ways to get around the law. For example, if State management agencies impose a 10 percent tax on 99.9 gold and lower rates on other types of gold, businesses will report gold at 9.8 or 6.0 to exploit the loophole.

Reporter: Do you mean that the current adjustments in the domestic gold market have exposed some shortcomings?

Dr. Vu Dinh Anh: Here’s the rule: the domestic gold market is not developing in line with fluctuations in the world market because of its own barriers. If the market is liberalized, there will be no more such stories.

Reporter: What should we do?

Dr. Vu Dinh Anh: The domestic market will benefit more if it is liberalized. We should clearly define “what is gold?”. In my opinion, gold should be considered as a type of goods under the management of the Ministry of Industry and Trade. On the other hand, gold can also be considered a kind of currency under the management of the State Bank of Vietnam. Gold should be traded within a certain framework, such as tariff barriers.

 

Once gold is seen as market goods, it should be monitored carefully to ensure that the market operates in a transparent manner and in line with the world. The domestic market should operate in accordance with the rules. The core matter is preventing speculation in the domestic gold market.

Reporter: If gold is exported in large volumes, will the national economy be affected?

Dr. Vu Dinh Anh: We have limited the import of gold for lack of US dollars, which affects the foreign exchange rate. At the moment, we’d rather export gold to get more foreign currency. However, we have to calculate carefully as gold prices are rising sharply in the global market.

Reporter: Thank you. – VOV

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