The Vietnam Association of Financial Investors (VAFI) is requesting the Ministry of Finance and State Securities Commission (SSC) to soon issue more conditional preferential tax policies for listed companies. “This is the most feasible measure to help speedily increase the scope of goods for the local stock exchange and pave an attractive investment environment for investors,” said VAFI.
To boost the stable and sustainable development of the Vietnamese stock market, there is a need to devise and materialise many measures to develop the bourse such as tying the equitisation task with the share listing; building and improving the legal basis on securities and stock market; universalising the knowledge of securities and stock market and such like. However, VAFI said that the Vietnamese stock market needs a firmer lever.
According to VAFI, there are two notable measures to accelerate the development of the local stock exchange. Firstly, the government should abolish the cap on capital ownership rate of foreign investors. However, if this measure is put into the Law on Enterprise, the local stock exchange must wait for approval by the National Assembly as far off as June 2006. The second measure is issue a conditional policy on tax incentives for listed companies in purpose of increasing sources of goods and attractiveness for the local stock exchange.
The SSC admitted that it really has failed in encouraging and persuading equitised businesses to list their shares on the bourse.
VAFI remarked that the measures to encourage and persuade companies to list shares would become useless if there are no specific preferential policies enclosed.
VAFI also suggested that in a bid to ensure the big source of tax receipts for the state budget because of preferential tax policies for listed companies, about 200 businesses will be entitled to these preferential measures with different preferential rates based on their share listing pace and these preferential tax policies will be stopped by 2010.
Banking and finance specialists said that if applying this policy, it is sure that immediately the local exchange stock will become very exciting and gain much higher points together with attracting many capital inflows.
“Together with the promotion measures, the cap on capital ownership rate (30%) imposed on foreign investors should be abolished, which will encourage many more equitised businesses to list their shares and have good conditions to mobilise capital,” said the chair of the VAFI adding that this will be a big capital mobilisation channel for the economy in future.
The sustainable development of the stock market will boost the equitisation process of state-owned enterprises and pave good conditions for unlisted shares to grow. The price of state equities in the first and second phases via selling state equities will increase from 10% to 40%.
According to the Ministry of Finance, up to the present, Vietnam still has 2,000 SOEs that have not yet been equitised whereas there are only 200 SOEs whose goods are ready for being listed.