Vietnamese government authorities are calling for the establishment of a nationwide database of e-commerce companies and online sales transactions that the government can monitor to ensure that all applicable taxes are being paid.
According to Lai Viet Anh, Deputy Director of the Ministry of Industry and Trade’s Vietnam E-commerce and Information Technology Agency, the country needs to create a shared database since there is no specific measure to calculate the revenues, sales and expenses of individuals and companies who are selling products and services through online channels.
From the perspective of the government, its difficult to understand the revenues, expenses, profits and taxable income from online sellers and then to calculate the correct tax rates that should be paid.
Under the MIT plan, online sellers database would be a centralized and standardized database that could be accessed by customs offices, tax agencies, band the MIT. The government is anticipating that banks will play a central role in the development and ongoing management of the database since they have direct access to customer records.
Current, the National Assembly, is discussing the role of banks in e-commerce and the proposed online sellers database and how they should be involved and regulated. A draft law that is being considered will require that any bank operating in Vietnam provide tax authorities with information on customers when they open accounts.
The draft law that is being discussed, does not specify that banks be required to provide details of transactions, but it is assumed that this will be a requirement if the amount of transactions is considered at a “commercial level” or which may be suspicious.
A report provided to National Assembly states the country losing billions of dollars in taxable revenue from online sales which are neither being declared, per the legal provision of existing laws, or which may be unpaid due to the ignorance of the law by small and medium sellers.
One of the representatives attending the National Assembly discussions said that the problems with creating a relevant and realistic framework on online sales and taxes is that the government wants to create optimal conditions for online sellers to conduct their business while trying to monitor and tax them.
In the draft law, there are provisions that encouraging online sellers to self declare their revenues and taxes, but the role of banks and the connection of customs and tax agencies are uncertain since they are not bound by the draft legislation.
The Hanoi Tax Department has proposed several of their own solutions, including working with the Ministry of Industry and Trade to make a master list of e-commerce companies that are registered with the MIT; and requesting banks and tax authorities to track cash flow through payments that other channels including the Apple Store, Facebook Google Play and YouTube.
Since there are also a large number of Vietnam “influencers” who make money through Facebook or YouTube activities, tax officials also want to make a database of these people and monitor their income and tax payments since some influencers are said to make more than $100,000 USD per month.