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Vietnam tax authorities face difficulty in collecting tax from Google, Facebook
Nguyen Tung 10:38, 2018/07/24
The recently-approved Cybersecurity Law could be a useful instrument to support tax collection in a sharing economy and the internet community, according to Bui Van Nam, director general of the General Department of Taxation.
The Ho Chi Minh City Department of Taxation is having difficulty in collecting tax from the likes of Google, Facebook, Uber and Grab, as those companies are multinational and host their servers outside Vietnam, according to Tran Ngoc Tam, director of the department. 

"It is difficult to collect tax from transnational companies, so we are monitoring their operations to look for an appropriate solution," Tam was quoted as saying by VnExpress at a meeting reviewing tax collection result in Ho Chi Minh City on July 23. 
 
Illustration photo.
Illustration photo.
Referring to the US$2.3-million back taxes owned by Uber in Vietnam, Tam said the ride-hailing firm's exit from the Vietnamese market makes it difficult for the local tax authority to collect the said amount.

Grab on March 26 confirmed that it had acquired Uber's Southeast Asia operations for an undisclosed sum, effectively ending the latter's presence in the region since 2014.

"We are waiting for the court's decision before looking for options," he added.

The tax department recommended the Ministry of Finance and the General Department of Taxation to finalize a legal framework, so that tax authorities could collect tax from such companies efficiently.

According to Bui Van Nam, director general of the General Department of Taxation, the Cybersecurity Law, approved by the National Assembly in June, could be a useful instrument to support tax collection in a sharing economy and the internet community. 

At the meeting, tax authorities admitted difficulties in managing cash flows in the local economy due to a high percentage of cash transactions in Vietnam. As such, they could not verify the actual revenue of enterprises and individuals. "We will continue monitoring money transfer websites to look for solutions and prevent losses in state budget revenue collection," Nam added.

One of the options is to use e-invoice with verification code, Tam suggested. 

In the first six months of 2018, the Ho Chi Minh City Department of Taxation collected VND130.5 trillion (US$5.6 billion), equivalent to 48.57% of the year's estimate and up 11.37% year-on-year. Meanwhile, the FDI sector saw the biggest decline in corporate tax collection among economic groups, down 8.15% year-on-year. 

Meanwhile, income tax collection witnessed the highest growth rate of 21.18% year-on-year. Revenue from salary and wage increased by 20.77% , accounting for 77% of total tax revenue collection.  

Overall, tax authorities collected VND531.5 trillion (US$23.2 billion) for the state budget, equivalent to 49.7% of the year's estimate and up 13.9% year-on-year. 
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