Gold can make profit, so it’s must be taxed: Government

To enhance market transparency and restrict gold speculation, the government has tasked the Ministry of Finance with collaborating with the State Bank of Vietnam to clarify that income from gold trading activities is subject to taxation in the draft amendment to the PIT Law.

The proposal to tax gold has received support from many experts. However, most recommend that the tax rate should be moderate to ensure easier management and fairness for all transactions.

Associate Prod Nguyen Huu Huan from the University of Economics HCMC said that taxing gold transactions aligns with market trends, as many countries around the world have already imposed taxes on this product.

“Taxing income from gold trading not only discourages speculative investment but also increases state revenue,” Huan emphasized.

He explained that in Vietnam, real estate and securities are already taxed, while gold is also a potentially profitable investment channel. Therefore, taxing profits from gold is a reasonable approach.

“Under current regulations, individuals transferring real estate must pay tax at 2 percent of the transaction value, while securities are taxed at 0.1 percent per transaction value. The same method could be applied to gold,” Huan said.

Regarding the option to tax profits from gold, Huan argued that this would be difficult to implement because many people bought gold decades ago without any documentation, making it impossible to determine the purchase price and calculate profit.

According to him, Vietnam could refer to the tax models in countries like China and India as references for policy development.

Another important issue, Huan added, is the need to clearly differentiate between pure gold and gold jewelry. 

“Plain gold rings are currently classified as jewelry, so are they taxable? Are people who buy and sell wedding gold subject to taxation? These are issues that require careful study,” he said.

In addition, the tax collection process must be clearly defined: who will collect the tax, whether gold-selling businesses will be responsible for collecting and submitting taxes, or whether tax authorities will handle it directly.

How to tax?

Sharing the same view, financial expert Phan Dung Khanh also believes that taxing income from gold trading would help curb speculation and short-term trading while boosting state revenue. However, he emphasized that the policy must clearly define the taxable entities - individuals, businesses, or both, to avoid double taxation or tax evasion loopholes.

Khanh pointed out that if a business has already paid corporate income tax on its gold-related operations, an additional tax should not be imposed. 

“Tax should only apply to businesses where gold trading is an ancillary income source (if they are permitted to trade gold) and to individuals,” he said, adding that centralized management is necessary to prevent tax evasion or the shifting of transactions to unofficial channels.

Regarding the taxation method, Nguyen Tri Hieu, a respected expert, believes that taxation should be based on profit rather than transaction value. 

“Taxing the full transaction amount is not appropriate, as the money people use to buy gold may already be post-tax income from salaries or business activities. Imposing tax on the transaction value could lead to a situation of "double taxation,” he warned.

Meanwhile, Khanh proposed applying a similar approach to the securities market, with a 0.1 percent tax on the sale transaction. The buyer would not be taxed until they sell the gold, thus avoiding double taxation.

He also noted that other methods could impose higher rates. For example, in the stock market, a 20 percent tax on profits was suggested. However, this method is more complex as it requires proof that the seller actually made a profit rather than a loss.

If tax is collected based on transaction volume, such as taxing only when selling 1 tael or more, it could lead to legal loopholes, with people splitting transactions or invoices to avoid tax. Therefore, applying a moderate tax rate, similar to the securities market, would be easier to manage and fairer for all transactions.

Even Hieu acknowledged that taxing profits will not be easy to implement, as it is difficult to determine the original purchase price, especially in cases where gold was bought decades ago. Therefore, the Ministry of Finance needs to develop a method that uses an average price at a specific point in time, while also requiring gold sellers to declare the purchase date to determine the input price. The average price published by the Ministry of Finance would serve as the basis for calculating the difference between the purchase and sale prices.

Manh Ha