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Tough to tax online vendors
The Saigon Times Daily
Monday,  Jul 10, 2017,20:00 (GMT+7)

Tough to tax online vendors

The Saigon Times Daily

Online shopping has grown popular among young buyers in major cities in Vietnam in recent years, helped by the rise of social media platforms like Facebook. But most online vendors do not pay taxes as tax authorities find it extremely hard to force them to comply with tax regulations.

The HCMC Tax Department has recently threatened to make public a long list of individuals and organizations that sell goods and services on Facebook but never pay taxes. The move is aimed at protecting the interests of those fully paying taxes and thereby guaranteeing fair competition.

The tax offices of the city’s 24 districts have informed online vendors of their obligations to file and pay taxes. Nonetheless, few have complied while the taxmen feel their hands tied because certain online vendors do not give truthful information.

The tax office of Binh Thanh District, for instance, has found more than 1,100 e-commerce pages on Facebook and websites having addresses in the district and invited the owners of 172 most active websites to come to the office to file and pay taxes. But only 98 of them have come, showing that they are complying with tax rules.

The owners of 677 Facebook pages and websites active in e-commerce have got notices from the Binh Thanh tax office but 548 of them have never shown up and 59 notices have been returned. Many vendors on Facebook who have come to the office reason they are small businesses with insignificant sales revenues and that they sell goods online as a second job, hence small revenues.

To evade paying taxes, some vendors have erased their addresses and only telephone numbers can be found on their pages, leaving no trail for looking for them. When there is an order placed, they will simply contact the buyer by phone to deliver goods to their customer’s door. And the most popular method of payment is cash on delivery, making it impossible for the taxman to track their transactions.

They use Grabbike service or self-employed people to deliver goods to their customers, instead of officially registered delivery service firms.

The HCMC Tax Department says it will conduct inspections into non-compliant online vendors to compel them to pay taxes, and even ask the Ministry of Information and Communications to close their pages. But it seems these measures are not enough to counter tax evasion by online vendors.

The Saigon Times Daily

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