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.

Keywords : beta, capital structure, economic crisis, risk, tax rate, wholesale and retail industry