Online business is becoming more and more popular.
Everyone does business online, every household does business online - that is the current commercial trend. In a busy society and for their own convenience, as well as to have more choices, consumers have switched to online shopping quite a lot and this trend is even "addictive" to many people.
Just type in something, about 1 hour later, hundreds of websites continuously send you the items you are looking for, freely for you to choose with equally transparent prices. As long as you like it and have enough payment conditions, you will satisfy your online shopping needs. The trend of online business and payment is growing, especially after the Covid-19 pandemic. Many small traders in markets have switched to online business, closing their stalls. Business activities in markets, shopping malls, and even food markets also pay online, using shipping services.
And from here, the risk of VAT loss is even greater if the State cannot fully control this business activity.
Potential tax loss
With just one online operation, after purchasing, from their account, consumers can transfer money to the seller. From a few tens, a few hundred thousand to millions, hundreds of millions of VND/transaction. When they understand the regulation that the Tax Department will coordinate with banks to check the seller's account to grasp the content of the money transfer, some consumers have been conscious when recording the content of the money transfer in the account, making it convenient for the Tax Department to further investigate the seller's revenue. For example: Ms. A transfers money for clothes, Mr. B transfers money for cement... when transacting over the phone. But gradually, due to frequent shopping, being busy and wanting to be quick, consumers only click on the money transfer operation without clearly stating the content of the transfer. This makes it difficult for the Tax Department to check the seller's account (if checked) and of course causes the risk of losing tax revenue when buying and selling without being able to control it. This is also causing headaches for the authorities.
Currently, the tax industry cannot count how many organizations, businesses and individuals are doing business online because their addresses are unclear, their business activities are irregular, their websites are unstable, they appear and disappear, they do business seasonally, their accounts are fake... But it can be seen that more and more people are doing business online. From students, to civil servants, workers, officials, small traders... all can do business and the number of online consumers is also increasing.
For sellers, as long as you want to do business and have an account, have the ability to communicate online, and even without capital, you can make money from online business by being an intermediary to get goods from one place and then have them shipped to another.
Ms. Nguyen Thi Thao in Quang Trung Ward (Vinh City) said: We get cheap "warehouses" on the internet, from there we connect with people who want to buy and act as intermediaries for transactions, no capital required. From there, we use the shipping system to deliver to the buyer.
From here, we can analyze the tax loss loopholes.
Firstly, the Tax Authority cannot or has not yet managed the seller's activities, does not know where the seller is, what address, what products they sell, how much revenue, and therefore cannot calculate taxable revenue. If the officers and employees of the Tax Authority are sent to collect taxes and do not make friends with the seller online, are not familiar with the seller's activities (selling to which groups, online fairs, selling through their Facebook, Zalo, Instagram friends with closed groups, private messages), they will not be able to grasp the seller's revenue and "moves and moves".
Second, if the tax authority cooperates with commercial banks to monitor the seller's revenue activities, tax losses may still occur. For example, if the seller does not require the buyer to transfer money directly to the seller's account but instead requires the buyer to transfer money to the shipping network.
Mr. Hoang Trung Ba - an online shopping customer said: A famous website sells fashion clothes, but when buying goods, sometimes they see the transfer to this account, sometimes they ask to transfer to another shipper. At the end of the day or weekend, the shippers transfer the payment to the shipping service company or to the seller. From here, with the transfer content not clearly stating the service, the Tax Department also has no basis to calculate tax if there is an inspection. Many sales establishments have used many shippers to deliver goods, or this time use this shipper, the next time use another shipper to avoid the "eyes" of the Tax Department. This shipper team is the "rationalization" of sales revenue for the seller, they completely stand up to receive the money and it is difficult to know who is doing the business.
Recently, in big cities, there has been a hunt for individuals who own websites that earn billions and tens of billions of dong from posting clips and earning a lot of money from advertising that attracts a lot of viewers.
In Hanoi, an individual earned VND80 billion from entertainment channels from applications. After being supported with tax payment instructions, if he fails to do so, he will be handled according to regulations. The owner of an entertainment channel in Dam Ha district, Quang Ninh province has just completed paying the VND810 million in back taxes. Websites with high traffic and high income are a problem in tax management in many localities if there is a lack of forces and knowledge about network activities to advise and handle.
How does the Tax Department get involved?
Realizing the above difficulties, the Ministry of Finance and the General Department of Taxation have directed local Tax Departments to fight against tax loss activities in this field. For example, the General Department of Taxation sent a list of major websites for coordination in collecting tax arrears. However, as analyzed above, the increasing number of online traders and consumers cannot be controlled.
Discussing this issue, Mr. Dinh Viet Dung - Deputy Head of Bac Nghe II Tax Department said that the Department is currently managing and establishing a set of data and websites provided by the General Department, in addition, requesting and mobilizing people to declare and pay taxes. There are two ways to pay, one is to collect previous taxes from 2022 and earlier, the other is to establish a set in 2023.
To manage sellers, up to now, the Bac Nghe II Tax Department has established a set of 20 business households on the digital platform. Some households have established a set of business management in reality (markets, stalls), but then when investigating, they found online sales activities, so the Tax Department surveyed to increase the tax rate accordingly. Some households had to agree to the tax increase proposed by the Tax Department. However, the Tax Department must have evidence and must be able to investigate.
Mr. Dung also added that online data information, many times, does not have a legal basis to verify the authenticity, for example, a person in Dien Chau but writes a Facebook page address in Vung Tau, for example... When the Tax Department asks the bank to provide seller data, the bank also provides it, but some transactions cannot be taxed because the transaction content is not clearly shown.
At the Vinh Tax Department, in the first 6 months of the year, 29.9 billion VND was collected and processed, reducing losses by 72.4 billion VND. Exploiting additional revenue from e-commerce, 8.4 billion VND was obtained. The Nghe An Tax Department once sent a notice to a number of banks asking for support but there were no results, or the results were insignificant because the banks did not have much seller information and the transactions did not show the content.
Some Tax Departments also admit that currently the Tax sector can only manage large sales sites, while many small websites do not have data for tax management or have not yet included revenue sources of less than 100 million VND/month in the set.
Some Tax Departments are also manually searching for sellers by assigning young staff to search for sellers online. However, this activity also has certain limitations. Another activity for tax management is that the Tax Department makes friends with taxpayers on Zalo in the form of consulting and policy support activities, thereby also better understanding taxpayers' activities.
At Song Lam 1 Tax Branch, Mr. Mai Van Dong said: Implementing the project to develop revenue sources and prevent budget losses, the Branch has collected an amount of VND 20,106 billion in 2022, of which VND 218.4 million was collected from transport business tax losses, VND 19.75 billion was collected from real estate transfer tax losses (3,911 records) and VND 137.4 million was collected from e-commerce tax losses. Particularly, Song Lam 1 Tax Branch has deployed 9 records to prevent online business tax losses. In the first 6 months of 2023, the Branch collected VND 3.6 billion from these activities, mainly from land and property transfer activities on land, online business has not had any results.
Currently, the Nghe An Tax Department is focusing on directing the fight against revenue loss in this field, including coordinating with commercial banks, credit institutions, coordinating with other sectors in investigating and surveying transactions, delivery and postal services, and supplementing human resources to grasp, especially in the context of using electronic invoices and paying taxes electronically.
According to Clause 1, Article 3 of the Law on Personal Income Tax 2007, amended by Clause 1, Article 2 of the Law on Amendments and Supplements to a Number of Articles of Tax Laws 2014, business income of individuals with annual revenue of VND 100 million or less will not be subject to tax. This means that if annual revenue is over VND 100 million, business individuals are required to pay tax and individuals receiving income from organizations such as Facebook, YouTube, Google, etc. are classified as business individuals, not individuals receiving salaries or wages from foreign organizations. However, tax authorities in many places have not been able to determine how much revenue online businesses have.
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