VAT should be imposed on small value goods imported via Shopee and TikTok

On the afternoon of June 17, continuing the 7th session, the Minister of Finance, authorized by the Prime Minister, presented the Report on the draft Law on Value Added Tax (amended).

According to Minister Ho Duc Phoc, the draft law amends and supplements the provisions in 11 articles of the current Law, including taxpayers; non-taxable subjects; taxable price; tax rate; tax deduction method; direct calculation method on VAT; input VAT deduction; tax refund cases; invoices, documents; effective date; implementation organization.

The new point of this draft law is to add a provision that VAT is not collected for some imported goods within the import tax exemption limit and VAT is exempted for goods of small value. The current law does not provide for tax exemption for goods of small value, but is implemented according to Decision 78/2010 of the Government.

Accordingly, small imported goods worth less than 1 million VND sent via express delivery service are exempt from import tax and input VAT (import stage). Gifts and presents are also exempt from import tax according to Decree 134 guiding the Law on Export and Import Tax.

Minister of Finance Ho Duc Phoc (Photo: National Assembly Media).

Examining this content, Mr. Le Quang Manh - Chairman of the National Assembly's Finance and Budget Committee said that with the explosion of cross-border e-commerce, the volume of small-value cross-border transactions of goods has increased many times in recent times.

In Vietnam, every day, an average of 4-5 million small-value orders are shipped from China to Vietnam via Shopee, Lazada, Tiki, TikTok, etc. Many countries have abolished the VAT exemption for small-value imported goods to protect revenue sources and create an equal business environment between domestically produced and imported goods.

Therefore, the auditing agency recommends that the Government have appropriate policies to expand and cover revenue sources in the context of current budget constraints, and explain the legal basis of Decision No. 78/2010 of the Government.

This revised draft law stipulates that fertilizers, offshore fishing vessels, securities depositories... will be subject to 5% VAT (instead of the current 0%).

Mr. Le Quang Manh - Chairman of the Finance and Budget Committee (Photo: National Assembly Media).

Mr. Manh said that in the Finance and Budget Committee, there were two streams of opinions. One stream agreed with the content of the draft Law to resolve the long-standing problems and inadequacies of the current VAT policy for domestic production industries of these goods;

A stream of opinions disagrees with the Government's proposal and believes that applying a 5% tax rate will increase input costs for agricultural production, increase product prices, and reduce the competitiveness of domestic agricultural products.

Therefore, the Finance and Budget Committee recommends that the Government carefully assess and report more fully on the impact of this policy amendment, from the perspective of impact on domestic production sectors as well as from the perspective of impact on farmers.

Regarding the orientation of increasing the common tax rate of 10% , the auditing agency believes that the common tax rate of 10% in Vietnam is currently lower than that of other countries in the region and the world, showing that Vietnam has room to increase the VAT rate, especially in the context of needing to expand the revenue base.

Currently, some countries in the ASEAN region have been increasing VAT rates as a solution to improve budget collection efficiency after the pandemic. The tax system reform strategy until 2030 has also determined the direction of "researching to increase VAT rates according to a roadmap".

“The Government is requested to assess the impact of some options for increasing tax rates according to the roadmap to consider the possibility of stipulating a roadmap for increasing tax rates in the draft Law appropriately, after the economy has recovered, possibly at the end of the 5-year period 2026-2030,” Mr. Manh stated .

Source: https://www.nguoiduatin.vn/nen-danh-thue-vat-hang-gia-tri-nho-nhap-khau-qua-shopee-tiktok-a668771.html