Minister of Finance Vu Van Ninh affirmed that the stock market was on the upswing after hitting rock bottom. However, the government is still proposing to exempt securities investments from personal income tax (PIT) until the end of 2010.


Why is the government proposing to exempt securities investments from PIT until the end of 2010?


I think that the rebounding stock market will improve the national economy and serve as an effective channel to introduce Vietnam to foreign countries, through which the government and businesses can mobilise long-term investment capital.


The market, which suffered a lot of negative impacts, fell sharply in the last time and has just shown signs of recovery. However, it is expected that strong recovery still will not be obtained until 2010. Even if the market recovers strongly, the investors who were present in the market in 2007 and 2008 still will not be able to recoup their losses immediately. Therefore, we think that we should not tax them now. Moreover, the tax sum collected from securities investments would not be big, just 100 billion a year as the market index stays low.


The tax exemption has a very important significance. This gives signals to both domestic and foreign investors that the state has been trying to develop the market so investors feel secure with their investments.


Why does the Finance-Budget Committee of the National Assembly only want to exempt tax until the end of 2009, not 2010 as proposed by the government?


It is quite normal for different agencies and different people to have different ways of thinking and understanding. The government makes proposals, while the National Assembly has the power to make decisions.


Some people fear that the tax exemption may cause a ‘virtual fever’ on the market, thus badly influencing the national economy. What would you say about that?


I believe that investors have learnt lessons in the last few years, since the stock market became operational in Vietnam. People make investment decisions based on their analyses, not by following others like in 2006 and 2007.


What is your forecast about the stock market’s performance from now to the end of the year?


The stock market reflects the health of the national economy. I think that we now have better conditions for the market to recover as the national economy is better off. We hope that Q1 2009 saw the lowest economic growth rate, which we call the period of ‘rock bottom’.


Regarding the suggestion on personal income tax payment delay, some people say that this will only benefit high-income earners. What would you say about that?


The Personal Income Tax is not a tax targeting high-income earners only. The tax law also targets those with medium incomes.


The government is striving to stimulate investment and consumption, and you know, it is necessary to encourage people with means to make contributions to economic growth, while it would be a waste of time to encourage those who cannot do that.