Many online business people have not declared and paid taxes.
The Ministry of Finance is seeking comments on a draft Decree regulating tax management for business activities on e-commerce platforms and digital platforms of business households and individual businesses.
According to the Ministry of Finance, the size of Vietnam's e-commerce market has grown strongly in recent years, from 16.4 billion USD in 2022 to 20.5 billion USD in 2023, estimated to reach 25 billion USD (equivalent to about 630,000 billion VND) in 2024.
Tax collection management data from 2022 to 2024 shows an increasing trend in total tax revenue from organizations and individuals with e-commerce business activities: 83,000 billion VND in 2022, 97,000 billion VND in 2023 and 116,000 billion VND in 2024.
However, tax revenue from households and individuals doing business is very low: in 2022 it is 183 billion VND and in 2023 it is 67 billion VND, in 2024 it is expected to reach 2,500 billion VND (collected from more than 300,000 individuals doing business on more than 400 e-commerce trading floors).
Total tax revenue from e-commerce business activities of domestic enterprises, business households and foreign suppliers without permanent establishments in Vietnam accounts for only about 20% of e-commerce market revenue. This proportion is on a downward trend from 20.1% in 2022 to 17.4% in 2024.
The size of Vietnam's e-commerce market in 2024 is estimated to reach 25 billion USD (equivalent to about 630 trillion VND). Photo: Minh Ngoc
“Currently, tax departments and tax branches manage tax collection for households and individuals doing business on e-commerce and digital platforms. This is not really effective. Tax revenue from e-commerce business activities is very small compared to the scale and growth rate of e-commerce and digital platform business activities,” the Ministry of Finance commented.
According to the Ministry of Finance, many businesses have not yet declared and paid taxes according to tax laws on revenue from e-commerce activities.
For example, there are still a large number of business booths on e-commerce platforms that have not identified sellers. Statistics on 5 major e-commerce platforms (Shopee, Lazada, Tiki, Sendo, Grab) show that there are more than 300,000 booths with unidentified users with sales of over 70,000 billion VND.
Will reduce procedural pressure for 300,000 individuals/business households
The Ministry of Finance affirmed that the development of a Decree on tax management for business activities on e-commerce platforms and digital platforms of business households and individual businesses is very necessary.
The basic contents of the draft decree include:
The scope of responsibility for deducting and paying taxes on behalf of organizations that are e-commerce trading floor managers, digital platform managers with domestic and foreign payment functions, and organizations with other digital economic activities;
How to deduct, pay taxes on behalf of, and declare deducted taxes on behalf of households and individuals whose business activities are carried out by organizations managing e-commerce platforms that are eligible for deduction and payment of taxes on behalf of;
Records and procedures for tax declaration, tax payment and tax refund of households and individuals conducting business activities on e-commerce platforms and digital platforms are not eligible for tax deduction and payment on behalf of others.
Assessing the impact of implementing the above Decree, the Ministry of Finance emphasized: "With the regulation on the organization of management of e-commerce platforms, digital platforms with payment functions and other digital economic organizations responsible for deducting and paying taxes on behalf of households and individuals with business activities, it will reduce the volume of administrative procedures in tax declaration and payment of more than 300,000 business individuals and business households".
Along with that, regulations on the responsibility of providing personal identification information of sellers when doing business on e-commerce platforms, digital platforms, other digital economic activities and regulations on organizations managing e-commerce platforms, digital platforms with payment functions, and other digital economic activity organizations deducting and paying taxes on behalf of business individuals will increase state budget revenue.
Only counting unidentified entities on e-commerce platforms, assuming that these stores are owned by individuals with revenue higher or lower than the threshold for revenue not subject to value added tax (VAT) and personal income tax (PIT), the estimated revenue at a rate of 1.5% on the revenue of 70,000 billion VND would also reach about 1,000 billion VND.
Not to mention the increase in state budget revenue for income that individuals have not declared or have not fully declared.
Clause 2, Article 4 of the draft Decree stipulates that the amount of VAT and personal income tax to be deducted is determined as a percentage of the revenue of each completed transaction.
- VAT rate: goods: 1%; services: 5%; transportation, services associated with goods: 3%.
The percentages for transportation, services and services attached to goods specified in this point apply equally to resident and non-resident individuals.
- Personal income tax rate is implemented according to the provisions of the Personal Income Tax Law:
+ For resident individuals: goods: 0.5%; services: 2%; transportation, services associated with goods: 1.5%.
+ For non-resident individuals: goods: 1%; services: 5%; transportation, services associated with goods: 2%.
In case the organizations managing the e-commerce platform cannot determine whether the transaction generating revenue from the e-commerce platform is goods or services, the determination of the amount of tax to be deducted shall be carried out according to the highest rate prescribed in this clause.
Vietnamnet.vn
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