Vietnam Raises Gold Import Tax to Curb Trade Deficit

The Vietnamese Ministry of Finance has decided to double tax on imported gold to 1 per cent, which will come into effect from May 20, in order to narrow the soaring trade deficit, the Tuoi Tre newspaper reported May 17.

 

The ministry signed the decision May 13, however, officially informed local gold suppliers until May 16, the newspaper said, noting the tax increase may not have any impacts on gold imports, but will be likely to drive the domestic gold price higher than the world price.

 

“That could lead to gold being smuggled into the country and US dollars being drawn out,” Nguyen Thi Cuc, deputy director of Phu Nhuan Jewelry Joint Stock Company, explained.

 

In the past, Vietnam once taxed 3 per cent-5 per cent on gold imports, which resulted in an increase of illegal imports of gold and illegal dollar bleeding through border gates, causing ups and downs in the market.

 

The afternoon of March 16 witnessed some big companies to stop putting gold on sales to wait for higher prices.

 

A representative from HCM City-based gold company said many domestic gold suppliers were not prepared for the increase and would lose if their imports arrived on or after May 20.

 

At Saigon Jewelry Holding Company, a tael (1.2 ounce) of gold was sold at VND17.77 million, an increase of VND380,000 per tael, putting local gold lower than world gold.

 

Many people are buying gold as they consider it a better way to preserve their assets amid high inflation. (Youth)