Collecting nearly 95 trillion VND in taxes, considering using AI to control e-commerce platform revenue

In the first 10 months of 2024, the amount of tax paid by organizations and individuals engaged in e-commerce business activities was about 94.6 trillion VND.

E-commerce tax revenue increased by 17%

November 7, General Department of Taxation has informed the press about the implementation of tax work in October 2024. Including tax management work. e-commerce

According to the General Department of Taxation, in the first 10 months of 2024, the accumulated tax amount paid by organizations and individuals with e-commerce business activities was about 94.6 trillion VND, an increase of 17% compared to the average tax amount in the first 10 months of 2023.

The e-commerce information portal has recorded 412 e-commerce trading floors providing information. Accordingly, there are more than 191 thousand organizations and individuals doing business on e-commerce floors with a total transaction value of nearly 72 thousand billion VND.

To date, 116 foreign suppliers have registered, declared and paid taxes via the Electronic Information Portal for Foreign Suppliers. As of the end of October 2024, the state budget revenue from foreign suppliers was VND 19,774 billion. In 2024 alone, the revenue was VND 8,200 billion, an increase of 18.9% over the same period in 2023.

In the first 10 months of 2024, the General Department of Taxation collected nearly 95 trillion VND in e-commerce tax. Photo: Le Na

The representative of the General Department of Taxation said that along with the development of science and technology, e-commerce has become an important economic sector in many countries, including Vietnam, due to its superiority. However, this is a new and rapidly developing sector in Vietnam, so general management is facing many difficulties, especially tax management for e-commerce.

“Although the State currently has quite comprehensive tax regulations for this type of e-commerce, it is still necessary to make adjustments to tax management for e-commerce and ensure a legal basis for tax collection.” - said the representative of the General Department of Taxation.

According to the provisions of Decree No. 52/2013/ND-CP dated May 16, 2013 of the Government on e-commerce (amended and supplemented by Decree No. 85/2021/ND-CP), e-commerce platform business activities are activities that must be licensed and subject to state management. Ministry of Industry and Trade.

Regarding tax management for e-commerce business activities, business on digital platforms is managed by tax authorities according to the provisions of the Law on Tax Administration and Circular No. 80/2021/TT-BTC of the Ministry of Finance. Accordingly, e-commerce platform managers are responsible for registering, self-calculating, self-declaring, and self-paying taxes directly through the General Department of Taxation's Electronic Information Portal (the General Department of Taxation has deployed the Electronic Information Portal for foreign suppliers since 2022).

The General Department of Taxation said that for cross-border e-commerce business activities on digital platforms, if foreign suppliers generate revenue in Vietnam but have not yet registered for tax, the tax authority will review and take appropriate measures to ensure effective, transparent and fair tax management for traditional business activities.

In case the foreign supplier declares incorrect revenue, the tax authority will compare data to determine revenue, request the foreign supplier to fulfill its obligations and conduct inspections and checks according to regulations if there are signs of fraud or tax evasion.

The General Department of Taxation emphasized that, in order to ensure effective management of this activity, the General Department of Taxation has promptly researched and advised competent authorities to issue legal bases and deploy the operation of the General Department of Taxation's Electronic Information Portal. Currently, the General Department of Taxation has been and is continuing to assess the practical situation of tax management for foreign suppliers and refer to international experience to continue to perfect the draft Law on Tax Management, Law on amending and supplementing a number of laws, Law on Value Added Tax, Law on Corporate Income Tax, Decree amending and supplementing Decree No. 123/ND-CP on invoices to manage taxes for this activity to ensure effective tax management, correct and sufficient tax collection for foreign suppliers when doing business in Vietnam.

“In the coming time, the General Department of Taxation will continue to strengthen the dissemination of tax policies to entities, especially new entities with production and business activities in Vietnam, to create the most favorable conditions for them to feel secure in production and business and contribute tax obligations to the state budget.” - General Department of Taxation information.

Using AI to control revenue on e-commerce platforms

The issue of tax loss in e-commerce has also been hot on the National Assembly floor in recent days. Specifically, contributing to the discussion on amending the Law on Tax Administration and requiring e-commerce platforms to declare and pay on behalf of sellers, Delegate Tran Hoang Ngan (Ho Chi Minh City Delegation) suggested that the Government and the Ministry of Finance need to have solutions to collect import tax on goods sold through e-commerce channels.

Mr. Ngan said that collecting taxes on imported goods through e-commerce platforms will help the budget avoid revenue loss and have more resources to invest in technology infrastructure, digital infrastructure... to make buying and selling transactions more convenient.

In recent times, cross-border e-commerce shopping has exploded. The volume of transactions of small-value goods has increased many times compared to before. Most recently, the appearance of many sales platforms in the domestic market without a license to operate, such as Temu, Shein, 1688... raises the issue of inadequacies in management and policies that allow Temu or Shein to enter Vietnam without registration.

Therefore, when examining amendments to the tax law, the Finance and Budget Committee also proposed that the Government should have additional solutions to increase tax collection from foreign suppliers in e-commerce.

During the discussion session on budget and public investment on November 5, Deputy Prime Minister Ho Duc Phoc explained and said that from next week, the tax authority will use artificial intelligence (AI) tools to control revenue and sales on e-commerce platforms.

According to the Deputy Prime Minister, the tax sector has applied many measures to prevent tax losses in e-commerce. Currently, about 102 foreign suppliers such as Meta (Facebook), Google, Tiktok, Netflix, Google... have declared and paid taxes through the industry's electronic information portal. Accumulated from March 2022 - the time the information portal for foreign suppliers was put into operation, foreign enterprises have paid over 18,600 billion VND.

Regarding domestic e-commerce platforms, the Deputy Prime Minister said that the tax sector will start collecting taxes this year. Of which, Hanoi alone has collected about 35,000 billion VND as of early November.

“Next week, the tax industry will launch an artificial intelligence (AI) tool to control revenue and sales of e-commerce platforms, especially cross-border platforms.” - The Deputy Prime Minister said; at the same time, he added that this is one of the solutions of the tax authority to prevent revenue loss through this channel.

Previously, Mr. Phoc said that the Government will remove the regulation of VAT exemption for small-value imported goods sold through e-commerce platforms to avoid tax losses.

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