Tax Rates Effects on the Risk Level of Listed Viet Nam Wholesale and Retail Firms during Global Economic Crisis 2007-2009

Abstract

The emerging stock market in Viet Nam has been developed since 2006 and
was affected by the financial crisis 2007-2009. This study analyzes the impacts
of tax policy on market risk for the listed firms in the wholesale and retail
industry as it becomes necessary. First, by using quantitative and analytical
methods to estimate asset and equity beta of total 9 listed companies in Viet
Nam wholesale and retail industry with a proper traditional model, we found
out that the beta values, in general, for many institutions are acceptable.
Second, under 3 different scenarios of changing tax rates (20%, 25% and 28%),
we recognized that there is not large disperse in equity beta values, estimated at
0,603, 0,609 and 0,613. Third, by changing tax rates in 3 scenarios (25%, 20%
and 28%), we recognized that both equity and asset beta mean values have
positive relationship with the increasing levels of tax rate. Finally, this paper
provides some outcomes that could provide companies and government more
evidence in establishing their policies in governance.