Vietnam’s Ministry of Finance has started asking e-commerce and delivery companies to furnish data about the revenue of their vendors in order to stop tax evasion.
Ta Thi Phuong Lan, Deputy Head, Department of Tax Administration for Small and Medium Enterprises and Individuals said that authorities have begun to tax people selling online, but that it has been very hard to determine their revenues.
Lan said that by working directly with e-commerce websites and delivery companies, tax authorities will be able to identify sellers’ revenue streams.
Vietnamese tax officials have faced a dilemma for several years – namely how to tax online sellers in a fair and equitable manner, that creates a leveling playing field for both physical retailers and online sellers.
Physical retailers have made multiple complaints to local, regional and national tax authorities that they pay taxes on good and services that are generated through their company’s but online retailers have not had to pay similar taxes, giving them an unfair advantage.
Government authorities believe that coming up with an equitable and transparent system related to online sellers is eminently necessary, and that implementation of a taxation system for online sellers will also solve another problem - preventing the sales of contraband and fake goods.
Vietnamese love of e-commerce has grown exponentially in recent years and social and shopping restrictions that have been put in place for the last year because of the COVI -19 pandemic have induced both companies and individuals to sell products and services online through e-commerce and social media platforms.
According to a local e-commerce agency, Vietnam’s e-commerce market was estimated to have grown 18% in 2020 with a value of more than $11.8 billion USD. Vietnam is the only country in Southeast Asia to have record double-digit growth in e-commerce during the COVID-19 pandemic.