E-commerce grows but taxes hard to collect

Experts have recommended amending e-commerce regulations that would allow authorities to better manage and collect tax as well as develop the sector.- Photo bizlive.vn

Mạch Thị Tuyết Mai from the General Department of Taxation’s policy division, said: “We have encountered difficulties in tax collection.”

The issuance of business licenses for e-commerce firms remains confusing because some kinds of e-commerce are not included on the tax list. Therefore, it is hard for tax authorities to determine the appropriate tax collection form.

Most businesses in Việt Nam still use paper invoices, while some businesses have used e-invoices but do not have a system to connect with the tax agency.

As a result, tax agencies found it hard to identify the revenue of these businesses, she told the Vietnam Online Business Forum held in HCM City on March 17.

“We are now conducting an electronic invoice project to submit to the Government. The project will encourage all businesses to use e-invoices connected to tax agencies. This will make management easier and we will have to avoid using fake invoices,” she said.

Another issue is tax collection from cross-border service providers and organisations that have income in Việt Nam, according to the official.

The sale of products on Facebook, Zalo and websites has grown strongly, but sellers do not issue invoices and declare their revenue, leaving difficulties for tax agencies to collect tax.

Nguyễn Thanh Hưng, deputy chairman of the Việt Nam E-Commerce Association, said that a number of significant issues in public administration occurred last year.

He said that it was time for policy and law makers to create a more favourable macroeconomic environment for e-commerce to develop.

The challenges for policymakers are clearly very different from than those in previous years, according to Hưng.

Since e-transactions are now commonly used, direct participation of most government departments in developing e-commerce policies and laws is needed.

"Along with development technology, many new and different kinds of businesses are based on cloud computing, mobile technology, big data, social networks, the Internet of Things, and blockchain technology," he said, adding that these are all available in the country.

He said Việt Nam should urgently promote research on and application of blockchain technology, and at the same time, should not manage virtual currencies simply by prohibiting and then punishing violators.

Virtual currencies should be controlled under methods that are in line with the market economy during the interim period as the business community waits for new legal documents on management of virtual assets and digital and virtual currencies, Hưng added.

At the same time, accepting the experimental use of cryptocurrency in a few international transactions might be a careful but advantageous approach for the policy amendment process, he said.

“If organisations and enterprises do not participate, they may become too slow in conducting research about and investing in blockchain applications, and Việt Nam could be quickly left behind if cryptocurrency becomes a significant payment method for e-commerce.”

"In addition, Việt Nam needs to conduct research on the benefits of the sharing economy and make appropriate policies to encourage enterprises as well as other organisations to provide such services for the common purpose of raising socio-economic efficiency," he said.

Last year, the Ministry of Finance made public a draft of a proposal submitted to the Government to amend the Law on Tax Administration, which calls the law to be simple, clear, transparent, convenient and systematic.

The proposal, which requires the use of international standards, electronic tax administration, and a more favourable environment for taxpayers, was an important first step in tax administration for e-commerce.