Challenges of collecting e-commerce tax losses

File photo. Việt Nam is identified as the country with the fastest e-commerce growth in Southeast Asia. — VNA/VNS Photo

HÀ NỘI — Digital transformation is an inevitable trend that changes the way goods and services are consumed and supplied, especially activities on digital platforms, making tax management more complicated.

Minister of Finance Hồ Đức Phớc said that Việt Nam's total e-commerce revenue reached US$20.5 billion last year and will reach $30.5 billion by 2025.

Việt Nam is identified as the country with the fastest e-commerce growth in Southeast Asia. This raises requirements for tax management and management of goods quality and anti-fraud on e-commerce platforms.

A representative of the Ministry of Finance (MoF) said that tax management data in the last two years recorded tax collection results from organisations and individuals with e-commerce business activities at VNĐ83 trillion (US$3.42 million) in 2022, the tax paid was VNĐ97 trillion last year.

Tax management revenue from organisations and individuals with e-commerce business activities was VNĐ1.98 quadrillion in the first six months of this year.

Taxes paid amount to nearly VNĐ55 trillion. Twenty-six new foreign suppliers have registered, declared and paid taxes in Việt Nam.

To implement the Government's direction, the General Department of Taxation (GDT) has issued many directives and documents requiring provincial and city tax departments to strictly manage tax receipts.

In addition, the tax authority has increased the exploitation and review of e-commerce databases, continued to add to the database, and reviewed the quality of information provided by the platform.

At the same time, it has organised inspections and examinations of enterprises in the e-commerce sector, strengthened tax management in the field of communications and digital content creation generating income from online advertising on cross-border platforms and reviewed information for organisations and individuals livestreaming for selling on social platforms.

The GDT has also worked with the focal points of ministries and branches and agreed on a detailed plan for connecting and sharing data between ministries and branches and unifying standards and regulations for connecting and sharing data.

To date, this unit has completed over 90 per cent of the review of the Ministry of Public Security's database with the tax code database to implement the conversion of using citizen identification cards as tax codes in accordance with regulations.

At the same time, it has completed the integration of using VNeID with tax management platforms of tax authorities and the results so far have been 663,157 connections with a total of 400,791 citizen accesses.

In addition, the GDT has initially completed the sharing of databases from the Ministry of Industry and Trade, the Ministry of Information and Communications and the State Bank of Việt Nam, including data from 929 websites providing e-commerce services. Those include 130 organisations operating in the fields of telecommunications, advertising, radio and television, 144 million payment accounts including ten million accounts of organisations and over 134 million accounts of individuals at 96 commercial banks.

The results are essentially a database source for tax management of e-commerce. It is not only in big cities, tax management of e-commerce is also a concern of localities.

However, there are still many challenges in tax management, such as identifying and authenticating individuals and organisations participating in e-commerce activities, especially livestream sales activities, because taxpayers in these activities are anonymous.

In addition, the National Population Database is being connected with the databases and information systems of ministries, branches, and localities for household registration, tax, banking, and telecommunications of taxpayers, and this is being implemented for identification.

Therefore, the GDT said that the e-commerce database needed to be continued being reviewed and enriched from many sources such as data from e-commerce business platforms, data from shipping units and related ministries and branches.

Nguyễn Thị Lan Anh, director of GDT’s Tax Administration Department on Small and Medium Enterprises and Business Households, Individuals said that the tax authority would continue to promote support and guidance for taxpayers participating in e-commerce business activities, livestream sales to declare and pay taxes in accordance with the law.

At the same time, it would coordinate with domestic platforms and foreign e-commerce platforms to communicate tax obligations of organisations and individuals doing business on the platforms.

The GDT will also put into operation an electronic information portal for individuals and business households engaged in e-commerce activities to conveniently fulfil their tax obligations.