A customer shops on an e-commerce platform for Vietnamese products. (Photo: VNA) A representative of the Vietnam E-Commerce Association revealedthree obstacles in the way of e-commerce platforms that make it impossible topay tax in sellers' stead.
The first obstacle is that e-commerce platforms, in most cases,have little knowledge of all the tax codes and tax rates applicable to sellers'items. The platforms cannot calculate sellers' taxes properly without this taxinformation.
The second obstacle involves the absence of a digital system thatenables e-commerce platforms to declare and pay tax on sellers'behalf and allows tax authorities to check whether a specific transactiongenerates revenues.
The third obstacle centres around the payment method that ispreferred by buyers in Vietnam - cash on delivery. Buyers paying in cashmake it difficult for e-commerce platforms to monitor the revenuesrealised by sellers, adding complexity to tax calculation.
Nguyen Tran Hung, head of the Economic Information Systems andE-Commerce Faculty at the University of Commerce, remarked that it is noteasy to tax sellers who operate on multiple digital platforms.
If the sellers use sale management software on those platforms,the platforms could rely on revenue data stored in the software tocalculate sellers' taxes. Otherwise, tax authorities must make itmandatory for sellers to disclose their data to theplatforms to enable tax calculation.
"If sellers do not use sale management software, data sharingneeds to be made mandatory to enable tax calculation", said Hung.
According to Hung's suggestion, data disclosure shouldinclude sellers' revenue, profit, number of transactions, and items sold tohelp e-commerce platforms monitor sellers' cash flows more closely.
Bui Ngoc Tuan, deputy director of the Tax Advisory Serviceat Deloitte Vietnam, held that tax deduction at source is only possible aslong as e-commerce platforms are given the authority to collect tax fromsellers.
The deputy director called for a digital system that allowse-commerce platforms to monitor sellers' sales on a real-time basis to checktheir taxable income better. He also urged tax authorities to tighten the legalframework to prevent new tax avoidance and evasion practices.
Nguyen Minh Cuong, chief economist of the Asian DevelopmentBank, shared Tuan's view, saying that digital technology holds the key toeffective e-commerce taxation.
He took the search engine for tax classification asan example. The engine enables tax authorities to quickly detectfraudsters online, effectively curbing illegal practices among e-commercetaxpayers.
He also said Vietnam could learn from the Republic of Korea'sexperience before developing their e-commerce taxation.
The RoK has established an independent department incharge of e-commerce tax, tasked with collecting and analysingrevenue data declared by e-commerce enterprises andimposing fines on those involved in tax frauds.
On December 15, 2022, the General Department of Taxation launcheda national portal through which e-commerce taxpayers are required todisclose their data to the tax authority.
By 13 February, 258 e-commerce platforms, 14,883organisations, and 53,212 individuals have registered on the portal tocomply with the requirement./.
VNA
