By Shangguan Zhoudong (Chinadaily.com.cn)
Updated: 2007-07-17 14:56

An economist suggested yesterday that China impose a stamp tax only on stock selling, in order to restore investors' confidence, people.com.cn reported today.

Wu Xiaoqiu, director of the Renmin University of China's Finance and Securities Research Institute, said at an online forum on China's capital market that he was unsupportive of the government's stamp tax rise policies.

The stamp tax hike is an attempt to curb excessive speculation on the stock market and sustain stable development of the market, but the policy's effect did not meet original expectations, according to Wu.

The stamp tax on securities trading had been raised from 0.1 percent to 0.3 percent as of May 30 this year, according to the Ministry of Finance.

Liu Jipeng, a renowned stock market expert and professor at the Capital University of Economics and Business, said that the 0.3 percent stamp tax on both buying and selling of shares is too high for China's stock market.

Liu suggested the government lower the stamp tax to 0.2 percent to restore investors' confidence.

Statistics from the State Administration of Taxation show that the stamp tax on share trades in the first half of this year totaled 62.3 billion yuan (US$8.2 billion), up 7.7 times from the same period last year.

The stamp tax revenue reached 32.4 billion yuan in June, including an additional revenue of 21.6 billion yuan from the May 30 stamp tax hike.