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Submitted by ctv_en_8 on Tue, 05/20/2008 - 15:20
On May 19, the Ministry of Finance decided to increase the import tax on gold from 0.5 to 1 percent per tael in an effort to reduce the overall trade deficit and pump more money into the national budget.

This has sharply raised gold prices on the open market to VND17.9 million per tael, a rise of about VND700,000 per tael from five days ago.

 

The new tax, to be effective as of May 26, will be levied on unprocessed gold, semi-finished gold products and gold powder.

 

The new tax is expected to bring in more US dollars as local banks are said to be currently short of US dollars for business operations.


However, gold dealers have expressed their scepticism about the effectiveness of limiting gold imports. They argued that if gold smugglers bought greenbacks at an exchange rate higher than at the bank, people would be tempted to sell dollars to smugglers instead of banks. Smugglers could then use these dollars to import more gold illegally.

Two weeks ago, the Vietnam Association of Finance Investors (VAFI) asked the Finance Ministry to raise the import tax on gold to 10-20 percent per tael.

 

It reported that in the first four months of this year, the country spent US$ 1.2 billion importing about 43 tonnes of gold, nearly half of last year’s volume.
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