VCCI said that Article 7 of the Draft (amended) changes the time of deduction of personal income tax on stock dividends, in the direction of requiring deduction at the time of dividend payment. This regulation creates a major change in terms of obligations: from the tax only arising when shareholders actually have income from selling shares to the place where shareholders must pay tax immediately upon receiving shares.

According to VCCI, tax policy, in addition to the goal of collecting correctly and fully, also needs to ensure the ability to encourage business investment activities, enterprise development, thereby promoting economic development and nurturing sustainable sources of income.

VCCI analyzed that immediate taxation affects the interests of investors, reducing the motivation for long-term investment. Dividends in shares do not create real income for shareholders at the time of receiving dividends. In essence, this is just a technical adjustment in the capital structure, increasing the number of outstanding shares but not increasing the total value of shareholders' assets.

For example, an individual holds 100,000 shares priced at VND30,000/share. When the enterprise distributes dividends in shares at a ratio of 2:1 (2 old shares receive 1 new share), this individual receives an additional 50,000 shares. At the same time, according to legal regulations, the stock price will be adjusted to VND20,000/share. The total value of assets before and after receiving dividends is still VND3 billion, no income is generated, but the individual still has to pay VND25 million in personal income tax.

Imposing tax at the time of dividend distribution, according to VCCI, will create significant financial pressure and liquidity risks for investors, especially small investors. At the same time, this policy also reduces the attractiveness of long-term investment strategies when investors have to pay taxes before realizing profits.

From the perspective of enterprises, VCCI believes that paying dividends in shares is a solution to balance the interests of shareholders and enterprises. This method helps enterprises retain capital for production and business activities, while at the same time demonstrating profit sharing with shareholders in the form of increased ownership.

The proposal to impose tax at the time of dividend distribution in shares as in the Draft will make this solution less attractive, losing an effective tool for enterprises to have resources to reinvest in production and business activities. VCCI asks: If both have to pay taxes at the time of receipt, why should investors prioritize stocks while cash dividends bring immediate cash flow, have an immediate source of tax payment and do not have to bear potential risks in the future like stocks?

VCCI cited data from the tax authority, in the period 2016 - 2024, the actual personal income tax collected from stock dividends was about VND 1,318 billion. Meanwhile, if collected immediately at the time of distribution, the estimated tax amount could be up to VND 17,420 billion. It can be inferred that most shareholders have chosen to hold stocks for a long time. Thus, more than VND 10,000 billion "not collected" is actually in the enterprise, serving reinvestment in production and business, creating jobs, indirectly contributing to GDP growth and a stable, sustainable tax source for the budget in the long term. If forced to collect immediately, this capital flow may be withdrawn, reducing the ability of enterprises to reinvest and develop.

From the above analysis, VCCI recommends that the drafting agency should review the regulation on collecting personal income tax immediately when distributing dividends in shares. This not only affects investors but also negatively impacts the development capital of enterprises, thereby affecting the goal of nurturing sustainable revenue sources of the tax sector.