Shared database needed to fight tax loss in e-commerce

Officials and experts have suggested the development of a shared database, on which tax and customer agencies and banks work together to collect taxes from online sellers. - Photo thehekhoinghiep.com

A shared database was necessary because there is no specific measure to calculate revenues, sales and expenses of organisations and individuals selling goods and services online, according to the Ministry of Industry and Trade’s Vietnam E-commerce and Information Technology Agency deputy director Lai Viet Anh.

The main difficulty with collecting tax from e-commerce activities for government agencies was they were unable to address the revenues of online sellers, not to mention calculating tax rates for them, she said.

The shared database should be used regularly by tax agencies, customs offices, banks and the industry and trade ministry, she added.

Among the mentioned subjects, banks will play an important role as their customer database is expected to help government agencies track e-commerce transactions.

The involvement of banks operating in Viet Nam is regulated in the draft amendment of the Law on Tax Management, which is being discussed at the 14th National Assembly’s seventh meeting from May 20 to June 13.

The draft law required banks to provide tax agencies information of the customers when they open accounts, but not the details of their transactions, according to Le Xuan Truong, dean of the Tax and Customs Faculty at the Academy of Finance.

But banks must assure the confidentiality of the clients and their accounts, so banks should be asked to provide the details of transactions which are suspicious to tax agencies, he said.

According to National Assembly deputy Mai Thi Anh Tuyet from An Giang Province, Viet Nam is facing a lower-than-expected tax collection as billions of dollars in tax from e-commerce activities are not paid to tax agencies.

“The tax levy on e-commerce activity has remained vague in the draft amendment of the Law on Tax Management,” she told reporters on the sidelines of the 14th NA’s seventh meeting on May 24.

The problems are how to watch over online sellers’ revenues, create good conditions for them to do business, and strengthen the co-operation among government agencies and banks to track sellers’ incomes, according to Tuyet.

In the draft law, there are some items encouraging online sellers to willingly declare their revenues. But the role of banks and the connection of tax and customs agencies have remained uncertain because they are not bound to this law.

Solutions have been proposed by the Ha Noi Tax Department. The department has made some measures to help online sellers pay taxes more easily and prevent tax losses in the e-commerce sector.

Since 2017, there are more than 13,400 Facebook users selling goods and services on social networks and e-commerce platforms. Of the total, 2,000 individuals have registered with the tax department and received their tax codes.

The tax department has also helped online sellers with tax registration and payment through papers and text messages.

The city’s tax department is working to collect more information about individuals selling products on social networks. It has also asked the Vietnam Telecommunications Agency under the Ministry of Information and Telecommunications and telecom services providers to co-operate and provide personal information of individuals that have set up their personal e-commerce pages. At the same time, the tax department is also working on possible measures to filter online sellers accurately.

The tax department has also worked with banks to track cash flow in and out of individuals’ bank accounts that are supplying applications and products on other channels like Google Play, Apple Store and YouTube so that their revenues are calculated and tax rates are defined.

The department is also working with the Ministry of Industry and Trade to make a list of e-commerce businesses that have registered with the ministry.