Vietnam collects far more tax from e-commerce services
Vietnam collects far more tax from e-commerce services
Vietnam’s tax revenue from cross-border and e-commerce services through organizations in the country annually rocketed 130 percent in the 2018-2021 period, according to a report by the Ministry of Finance.
The report on the implementation of Resolution 62 on question-and-answer activities at the National Assembly’s third sitting showed that Vietnam collected nearly VND5.6 trillion (US$232.2 million) in taxes from cross-border goods and services as well as e-commerce services.
The figure was some VND1.6 trillion ($66.3 million) in 2021 alone, soaring 39 percent year on year.
Between 2018 and 2021, Facebook paid nearly VND2.1 trillion ($87.1 million); Google, some VND2.1 trillion; and Microsoft, VND714 billion ($29.6 million).
As of the end of August, tax arrears and fines for late tax payment collected from Vietnamese organizations and individuals who earned income through e-commerce platforms totaled around VND1.1 trillion ($45.6 million).
The figure increased sharply over the years to reach VND261 billion ($10.8 million) last year.
In the January-August period of this year, the figure neared VND521 billion ($21.6 million), double that in 2021.
In addition, the Ministry of Finance has launched a portal at Etaxvn.gdt.gov.vn and the eTax Mobile app through which foreign service providers can declare and pay taxes online to Vietnam.
To date, there have been more than 140,600 eTax Mobile downloads and nearly 69,500 transactions worth over VND308 billion ($12.8 million) made through domestic commercial banks.
As many as 30 large foreign service providers, such as Microsoft, Facebook, Netflix, Samsung, TikTok, and eBay, have declared and paid taxes amounting to $22.2 million via the Etaxvn.gdt.gov.vn portal.
However, in the collection of taxes from cross-border service providers and e-commerce platforms, it is hard to determine the service providers’ revenue on which taxes are imposed, according to the Ministry of Finance.
In the digital economy, it is also difficult to distinguish between sources of revenue, especially copyright and service fees, and profit.
The control of e-commerce transactions to manage taxpayers is also hard. In reality, an individual can have many shops on an e-commerce platform and on different platforms and social networks.
It is not easy to control the money flow as the cash on delivery payment method is preferred to cashless payment.
Regarding solutions, besides the education and support of taxpayers, it is needed to improve regulations on tax collection to place the responsibility for declaring and paying taxes on behalf of traders on owners of e-commerce platforms, according to the Ministry of Finance.
In late August, the ministry submitted to the national government a draft decree amending Decree 126/2020, asking owners of e-commerce platforms to take responsibility for declaring and paying taxes on behalf of enterprises and individuals doing business on the e-commerce platforms, and providing the information of these enterprises and individuals.
Moreover, some regulations were proposed to be amended to reach a consensus in tax management. The management of taxes and the information technology infrastructure on tax declaration, payment, and collection will be improved as well.
The taxman will also develop a database to manage risks in e-commerce, apply artificial intelligence to processing data, issue warnings, build a smart tax management system, and beef up inspections of e-commerce services, focusing on those provided by foreign firms.
