Connecting data to prevent tax loss in e-commerce

In recent times, the General Department of Taxation (Ministry of Finance) has made efforts to implement many solutions to strengthen tax management for domestic and cross-border e-commerce activities. Photo: Pham Hau/VNA

Speaking at the conference, Minister of Finance Ho Duc Phoc said that he would focus on the results achieved; the existing limitations; the slow and debt-ridden tasks; the unfinished tasks of ministries and branches. From there, he would propose tasks and solutions for the coming time and make specific recommendations.

Minister Ho Duc Phoc also requested ministries and branches to focus on promoting data. Specifically, data must be confidential; safe; ensure "correct, sufficient, clean, alive". These things cannot be done by the Ministry of Finance alone, requiring close coordination of related ministries and branches. At the same time, complete the relevant legal basis such as: Decree on guiding electronic transactions; consumer protection; non-cash payments; funding for implementing information technology investment projects... to successfully connect and share data to serve e-commerce development, prevent tax losses, and ensure monetary security.

Mr. Mai Son, Deputy Director General of the General Department of Taxation (Ministry of Finance) informed the press about the tax management situation for e-commerce activities in Vietnam. Photo: Pham Hau/VNA

Deputy Director General of the General Department of Taxation Mai Son said: The Ministry of Finance has implemented many solutions to strengthen tax management for e-commerce activities, domestically and cross-border, such as: advising the Prime Minister to issue Directive 18/CT-TTg dated May 30, 2023 on promoting connection and data sharing to serve e-commerce development, prevent tax loss, and ensure monetary security.

Immediately after the Prime Minister issued Directive No. 18/CT-TTg, ministries and branches proactively developed detailed plans with specific tasks for each ministry and branch to implement according to their functions and tasks, and also sent documents to the Ministry of Finance for coordination. The implementation plans of each ministry and branch were developed in detail for each group of tasks, assigning units responsible for implementation, coordinating units and completion deadlines.

Regarding tax management, in recent times, the tax sector has approached e-commerce activities, according to platforms with e-commerce activities, to apply appropriate tax management measures including 8 groups of e-commerce trading platform platforms: Shopee, Lazada, Tiki, Amazon, Alibaba ...; E-commerce websites/applications: Abay.vn, Ahamove, Amway.com.vn, Bachhoaxanh.com, Dienmayxanh.com ...; social networking platforms (Facebook, Zalo, Tiktok, ...; transportation, transportation, delivery platforms (Grab, Be, Foody, Giaohangtietkiem, Giaohangnhanh ...); agency platforms (Booking, Agoda, Airbnb ...); subscription platforms (Netflix, Spotify, ...); advertising platforms (Facebook, Google, Youtube, ...); application store platforms (Apple Store, CH Play, ...).

According to the report of the General Department of Taxation, tax management data in the last 2 years recorded tax collection results from organizations and individuals with e-commerce business activities, as follows: in 2022, tax management revenue was 3.1 million billion VND (nearly 130.57 billion USD), with tax paid being 83 thousand billion VND; In 2023, management revenue was: 3.5 million billion VND (nearly 146.28 billion USD), tax paid was 97 thousand billion VND.

The General Department of Taxation has deployed inspections and handling of violations against organizations and individuals engaged in e-commerce activities who have not complied with tax obligations as prescribed. Cumulative results in 3 years (2021, 2022 and 2023), 31,570 organizations and individuals have been reviewed. Of the total cases reviewed, 22,159 business establishments have been processed for declaration, tax payment, tax arrears, and violations, with an additional tax amount of VND 2,917.9 billion; of which, processing of declaration, arrears, and violations is VND 1,818 billion, reducing losses is VND 986 billion, and reducing value-added tax deduction is VND 113.9 billion.

Tax is one of the main sources of revenue for the state budget. Photo: Tran Viet/VNA

The leaders of the General Department of Taxation also pointed out some difficulties and obstacles in implementing Directive No. 18/CT-TTg and managing e-commerce activities. The tasks assigned in Directive No. 18/CT-TTg to each ministry and branch, although having general requirements to be achieved by 2025, some work groups depend on the specific programs and plans of each ministry and branch.

Specifically, the amendment of specialized legal policies must follow the roadmap of the National Assembly's law amendment program. Therefore, the completion of legal regulations in the assigned state management fields to achieve the goals set out in Directive No. 18/CT-TTg may not be completed on schedule.

In addition, the connection of the National Population Database with databases and information systems of ministries, branches and localities is not yet synchronized. Most ministries, branches and localities are still slow in implementing electronic identification and authentication; synchronizing population data with civil status, tax, banking, telecommunications data...

This makes it difficult to identify and authenticate individuals and organizations to prevent fraud and tax evasion in e-commerce activities; it is difficult to identify and authenticate individuals. Data sharing between ministries and branches in the past has been mainly done manually, not electronically to ensure accuracy, regularity, continuity, and timely response to management requirements.

For the Ministry of Finance, the tax sector has been implementing the electronic invoice solution generated from cash registers for over a year. However, in the process of organizing and implementing the solution, there are still some difficulties and obstacles, mainly due to current legal regulations that do not require businesses providing goods, services, and retail directly to consumers to apply electronic invoices generated from cash registers, but are allowed to issue total invoices at the end of the day if they do not meet the conditions for connecting and transferring data to the tax authority for each transaction of goods sale.

At the conference, representatives from the Ministry of Industry and Trade, the State Bank, and the Ministry of Public Security shared specific information about the implementation of Directive No. 18/CT-TTg as well as suggestions and proposals for the management of e-commerce activities.

Deputy Minister of Public Security, Deputy Head of the Standing Team implementing Project 06 of the Government, Mr. Nguyen Duy Ngoc, said: Directive No. 18/CT-TTg has an important role for the units of the Ministry of Finance, Ministry of Industry and Trade, Ministry of Information and Communications, State Bank, Ministry of Planning and Investment, National Population Data Center. Each ministry has different tasks.

According to Deputy Minister Nguyen Duy Ngoc, when implementing Directive No. 18/CT-TTg, it is necessary to compare 6 groups of legal issues, technology infrastructure; data; security solutions; human resources; implementation resources. To report to the Government on the implementation results of Directive No. 18/CT-TTg, it is necessary to re-evaluate the tasks of each unit, what has been and has not been done to propose solutions to be implemented next.

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