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Home / Economy / Trade - Service
Grab Vietnam expects to pay US$21.5-million tax in 2018
Hai Yen 16:36, 2018/08/27
Grab Vietnam is currently subject to a tax rate of 5% over its revenue, which is applied to companies operating in the science and technology field.
Grab Vietnam is expected to pay nearly VND500 billion (US$21.5 million) in tax in 2018, VnExpress cited a reported of the company sent to the Ministry of Finance as saying.
 
Illustrative photo.
Illustrative photo.
In the first six months of 2018, Grab Vietnam paid over VND198 billion (US$8.51 million) in tax, four times higher than the figure recorded the same period of last year, and VND223.5 billion (US$9.61 million) in tax for the January - July period. 

The tax amount paid by the ride-hailing company in 2017 was reported at VND189 billion (US$8.13 million). 

According to statistics provided by Grab, its corporate income tax has been growing in recent years. Grab Vietnam is currently subject to a tax rate of 5% over its revenue, which is applied to companies operating in field of science and technology. 

Based on those data, Grab deemed recent accusations made against the company, which focused on fair competition, tax obligation, transfer pricing and tax evasion, groundless. 

Grab argued that tax obligation of passenger transportation services applying technology has to take into account that of Grab and its partners. Therefore, if only Grab is singled out to compare its tax payment with other transportation companies, there will be significant difference in terms of value. 

Moreover, as Grab does not own transportation vehicles, the company said it does not operate in the same way as other transportation businesses. 

Controversies surrounding Grab

Grab on March 26 confirmed its acquisition of Uber's South-east Asia operations for an undisclosed sum, raising concern over its alleged monopoly status in the region's ride-hailing market. 

The Ministry of Industry and Trade (MoIT) in May considered Grab's acquisition of Uber in Vietnam a violation of the Law on Competition, arguing its combined market share after the deal exceeds 50%. 

Based on that, the Vietnam Competition Authority under the MoIT is considering launching an investigation into the acquisition, while urging Grab to provide more evidences and calculate the exact combined market share. 

In July, taxi Associations from Hanoi, Ho Chi Minh City and Da Nang voiced their opinions against the extension of Decision No.24, which pilots the application of technology in managing and connecting electronic contract-based passenger transportation. 

Under the decision, Grab Taxi's services are allowed to operate in five cities and provinces, including Hanoi, Ho Chi Minh City, Khanh Hoa, Da Nang and Quang Ninh

According to the taxi associations, Grab arrived in Vietnam in 2014 with charter capital of VND20 billion (US$867,110), however, the company posted losses of VND938 billion (US$40.66 million) after two years implementing the pilot program. 

As of 2017, Grab's losses increased by VND788 billion (US$34.17 million), while nearly 50,000 drivers purchased or rented cars to become Grab's partners. 

In June, the MoT rejected Grab's proposal to expand its service network beyond the current five cities and provinces in the country. Before that, Grab had asked for permission to bring its service to a number of provinces and cities, including Ninh Thuan, Dong Thap and Gia Lai.
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