Investor account tax scrapped

The central government announced yesterday that tax would be temporarily scrapped on the interest income from securities accounts of individual investors.

The move, which follows the abolition of the 5 percent tax on interest income from bank deposits, is seen as yet another measure to shore up the sagging capital market.

A joint statement issued yesterday by the Ministry of Finance and the State Administration of Taxation said the policy applies to interest generated from securities account balance from Oct 9, the same day when the deposit interest tax was scrapped.

The move aims to revive market sentiment, which has taken a hard hit on the worsening outlook for corporate earnings in face of a global economic slowdown, Lin Yixiang, chairman of TX Investment Consulting Co in Beijing, said.

But Lin said that the action is unlikely to revive the stock market since it only returns small money to investors. Aggressive fiscal measures are needed to substantially boost sentiment in the stock and consumer markets, he added.