Increase in e-commerce tax evasion

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VIETNAM, January 26 –

A customer buys online. The pandemic has brought e-commerce to the fore as people shift their spending habits to online platforms. Tax evasion increases accordingly. — Photo nld.com.vn

HÀ NỘI — The COVID-19 pandemic has sparked an e-commerce boom in Việt Nam as consumers shift their consumption habits to online platforms. However, as online sales continue to grow, so does tax evasion.

The Hà Nội tax authority said it only collected VNĐ 14 trillion ($618.2 million) in taxes from companies and individuals engaging in e-commerce in 2021. Such a small figure does not reflect the actual size of businesses on online platforms, suggesting that there are businesses and individuals involved in tax evasion.

The tax administration has admitted that in e-commerce, it is more difficult to collect tax from individuals and households than from companies, since the former normally avoid income tax.

Recently, the tax office collected information on more than 32,800 online stores in the city. Of these stores, only 3,388 reported revenues of more than VNĐ100 million ($4,412) per year. This means that taxable stores only accounted for around 10%.

Nguyễn Minh Phong, an online seller, revealed that people who do business online have many ways to hide their real income. They can ask their customers to pay cash, create different accounts with different names to subdivide income, or report lower income. Their practice amounts to tax evasion and causes a huge fiscal loss for the state budget every year.

Many content creators on various online platforms, including YouTube, also avoid paying taxes. According to the Ministry of Information and Communications, there were around 15,000 lucrative YouTube channels in Việt Nam as of the end of 2020, 350 of which have over one million subscribers.

However, the tax authorities can only hold 5,000 channels liable for income tax. The rest don’t report their income, make dishonest statements, or evade tax through international payment gateways like Paypal and Payoneer.

Nguyễn Thị Lan Anh, director of the Department of Tax Administration of Small and Medium Enterprises and Households and Individuals, said that there are about 14 foreign technology giants and eight cross-border e-commerce websites in Việt Nam which have successfully meet their tax obligations. far.

“From 2018 to the end of October 2021, these companies paid a total tax of 4,263.82 billion VN ($187.8 million). Notably, Facebook contributed VN1,641.75 billion, Google VN1,573.24 billion and Microsoft VN560.67 billion, Anh said.

However, according to Anh, such a tax amount is minimal considering the scale of the e-commerce industry.

The director believed that the tax loss in small businesses could be attributed to the failure of taxpayers to file tax returns, the inability of tax authorities to find the locations of taxpayers’ businesses and taxpayers’ affairs unfolding beyond from nine to five.

When it comes to cross-border e-commerce, taxpayers usually do not register businesses or have any fixed place of business, which makes it impossible to collect taxes. In particular, some foreign companies refuse to pay taxes due to their lack of commercial establishment in Việt Nam, Anh added.

Considering the current situation, experts believe that tax authorities should intensify the application of technology in tax collection, such as Big Data, IOT and AI, to better collect business information and individuals, thus avoiding tax evasion on online platforms. —VNS


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