How to promote the e-commerce development without tax revenue loss is still an aching issue facing the Da Nang tax industry.

Recently, the local tax sector has initially implemented a number of solutions to strengthen the management and collection of e-commerce tax. A female taxpayer is briefed on tax policies at the headquarters of the Da Nang Tax Department. Photo: MAI QUE

According to the municipal Tax Department, the total number of e-commerce websites that have been identified so far is 8,710, of which 627 have been declared by taxpayers. However, there were only 8 cases under which taxpayers voluntarily declared and paid taxes, whilst some were still subject to administrative fines due to tax evasion acts.

In some typical cases, a businessman residing in Hoa Thuan Dong Ward, Hai Chau District, the owner of a website providing entertainment software generated VND 281 billion in revenue from the second quarter of 2015 to the second quarter of 2018, and finally, he has paid more than VND 23.5 billion in tax arrears.

Another case involves a man in Hai Chau 1 Ward, Hai Chau District who earned VND 13.8 billion from selling software services to domestic and foreign organisations and individuals from May 2014 to June 2019. Till date, local tax authorities have levied 342 million VND in fine on him for tax evasion.

Deputy Director in charge of the Da Nang Tax Department Luu Duc Sau pointed out to the fact that only 627 taxpayers have made tax declarations on a total of the detected 8,710 e-commerce websites. It is a very small percentage (just 7%), thus leading to a large tax loss.

In reality, a drove of petty sales on cyber buy and sell groups on such networks as YouTube, Facebook, and Apple, are still slipping under the radar. Despite earning much from advertising, the buy and sell groups in Vietnam have paid a little amount of tax.

Despite many difficulties, the local tax sector has initially implemented a number of solutions to strengthen the management and collection of e-commerce tax.

According to Mr. Nguyen Sac, Director of the Thanh Khe - Lien Chieu Tax Bureau, his unit has established 3 task forces which are in charge of monitoring e-commerce tax collections. In detail, the forces task themselves with collecting information on transport companies, organisations and individuals conducting online sales activities and food delivery apps.

Meanwhile, Ms. Le Thi Kim Lien, Deputy Director of Son Tra - Ngu Hanh Son Tax Bureau said that her agency is coordinating with local commercial banks to collect information such as made-through-bank accounts cash flow transactions between domestic organisations and individuals with foreign online service providers such as Google, Facebook, Youtube and more.

Many people show their interest in buying goods on the e-commerce platform Shopee. Photo: M. QUE

Mr.Vo Quang Tri, Dean of Faculty of E-commerce at the University of Economics underline a must-do to classify types and goods transacted via e-commerce, namely physical and digital goods.

Such a clear classification will help the tax industry develop monitoring plans. For example, for goods that must be delivered, it is necessary to cooperate with freight forwarding and shipping businesses to get information about commercial transactions, thereby estimating the volume of e-commerce sales as a whole.

Also, it is possible to propose an appropriate tax policy for all types of e-commerce activities in the direction of flat-rate tax, a tax with a single rate on the taxable amount, after accounting for any deductions or exemptions from the tax base

In the coming time, the municipal Tax Department will strengthen coordination with agencies such as economic police and commercial banks to continue to collect information e-commerce sellers using their platforms and services so they can be taxed.

In addition, heed will be paid to self-awareness of tax obligations amongst individuals touring for business on e-commerce websites.

The Viet Nam General Department of Taxation is collecting feedback on a draft law regarding taxation of individual sellers of e-commerce platforms, which offer two options.

While the first option requires sellers to pay their own tax, the other asks the e-commerce platforms such as Tiki, Shopee, Lazada or Sendo, to file and pay tax for the sellers if they handle the cash flow from these shops.

Reporting by MAI QUE – Translating by A.T