Tax on stock income coming in January
Vietnam's lawmakers have approved a 20 percent tax on income from the country's rapidly growing stock market.

The measure, approved by the National Assembly on Tuesday, will take effect in January 2009.

Until now, lawmakers have not taxed the fledgling market, which opened in 2000. But they have concluded the market has matured to the point where a tax would not harm its development.

The new tax, which was included in a broader income tax overhaul, will apply to both Vietnamese and foreign investors. It drew mixed reaction from investors Wednesday.

"I personally think this rate is too high," said Truong Duy Khiem, a trader at ACB Securities in Ho Chi Minh City. "Investors may look for other options."

Trinh An Huy, president of the Hanoi-based Club of Securities Investors, said the tax would strengthen the stock market over time.

"It will prevent speculation and help maintain the health of the market," he said.

The Vietnam Stock Index, or Vn Index, the main benchmark stock measure on the Ho Chi Minh Stock Exchange, fell 12.03 points, or 1.22 percent, Wednesday to close at 971.49 points.

The Ho Chi Minh Stock Exchange was one of the best-performing markets of the region last year, with the Vn Index growing 145 percent. It has grown nearly 30 percent this year.