People queue to buy gold at a shop on Trần Nhân Tông Street, Hà Nội. — VNA/VNS Photo

HÀ NỘI — Experts have recommended implementing a tax on gold transactions to help curb the demand from certain investor groups, particularly those engaging in speculative activities and gold price manipulation.

Currently, other investment areas like securities and real estate are subject to personal income tax, but gold transactions remain untaxed.

During a meeting focusing on policies for gold market management organised by the State Bank of Vietnam (SBV) on June 9, Associate Professor Dr. Nguyễn Thị Mùi, a member of the National Financial and Monetary Policy Advisory Council, proposed that the regulatory authorities should recommend developing a tax policy comparable to those applied in other investment sectors.

She said the tax-based solution could influence consumer psychology, leading them to shift towards other investment channels. This, in turn, would help to better control gold prices. The application of taxes would also ensure more fairness in the gold trading business.

Professor Dr. Hoàng Văn Cường, Vice President of the National Economics University, echoed her thoughts. He said that while the import of raw gold and gold bars may have different objectives, taxes must be collected in either case.

Dr. Lê Xuân Nghĩa, the former Vice Chairman of the National Financial Supervisory Commission, also emphasised that taxation is the most effective tool to address issues of gold smuggling and speculation in the market.

"Relying solely on administrative measures to combat smuggling is sometimes less effective than the use of taxation," Nghĩa said.

According to experts, gold has significantly outperformed other investment options since the start of the year in terms of returns. Over the past five months, gold bars have seen a rate of return of around 22 per cent, far surpassing the yields from bank savings, securities or bonds.

They attribute the overheating of the gold market in part to the lack of effective wealth accumulation channels available to investors. The real estate market is currently facing challenges, the bond market is in a crisis of confidence and long-term, risk-averse stock investing has not yet been widely adopted by the general public.

Meanwhile, Dr. Trương Văn Phước, the former Acting Chairman of the National Financial Supervisory Commission, suggested that the Government could leverage taxation as a tool to regulate both income and consumer behaviour.

He also advised citizens to be cautious and restrained in gold purchases, noting that the Government and the State Bank are working to bring down gold prices, while simultaneously managing the prices of many other critical goods.

Stricter managements

The SBV has also directed its provincial and city branches to strictly enforce regulations on foreign exchange and gold trading.

Credit institutions and authorised businesses must comply with laws on foreign exchange management and gold trading. Authorities are ordered to intensify inspections and crack down on violations, such as unauthorised foreign currency exchange and transfers, as well as the unlicensed buying and selling of gold bars.

The central bank is seeking tighter control over foreign exchange and gold markets to prevent illegal activities and stabilise the financial system.

It emphasised the urgency of implementing regulatory measures to tightly oversee the markets, prevent illegal activities like speculation and price manipulation and increase the use of technology in supervising and operating the gold market.

The SBV has also directed gold trading businesses to strictly comply with regulations on electronic invoicing for their gold buying and selling activities.

Additionally, the central bank has instructed local authorities to closely monitor the situation, and conduct more inspections and oversight within their purview. The authorities also target gold bar trading by shops lacking licences for such activities.

In an effort to stabilise the gold market, the authorities have implemented various solutions. One such approach involved conducting auctions to increase the supply of gold. However, this method was ultimately discontinued due to its lack of effectiveness.

Since June 3, a new strategy has been implemented, where price-stabilised gold is now being sold directly through four State-owned banks and Saigon Gems and Gold One Member Limited Liability Company (SJC).

Domestic gold prices tumbled since then, hitting the lowest in the past five months. On Monday, SJC gold prices were listed at VNĐ74.98 million per tael for sellers and VNĐ76.98 million for buyers.

The gap between the domestic and international gold prices has narrowed to VNĐ8 million. — VNS