Legislative body says no to tax break on dividends

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A proposal by the finance ministry to make dividends tax exempt for stock investors has been rejected by legislators.

At a meeting with the National Assembly's Finance and Budget Committee on May 6, the Ministry of Finance submitted a proposal under which stock market players are exempt from 5 percent tax rate on dividends and the 0.1 percent tax on each transaction. In addition, the ministry suggested the personal income tax threshold be raised to VND5 million (US$243) per month.

The tax exemption was also proposed for those earning less than VND6.6 million ($320) and having one dependent and for those with incomes of less than VND8.2 million ($398) and two dependents.

The ministry said its proposal aimed to boost investor sentiment amidst the gloomy stock market and support income earners as prices rise.

The proposal was originally slated to be submitted to the National Assembly at a meeting in June if it wins the approval of the assembly's Finance and Budget Committee.

But now, with the committee's leaders saying that the current tax rates were not "really unreasonable," the ministry said it would have to make some adjustments to the proposal and submit it again next year.

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