Draft law designed to lift banks’ role in e-commerce
Hanoi (VNA) - Payments for e-commerce
transactions must be made via banks or authorised payment intermediary
services, according to the draft of the amended Law on Tax Management.
The draft law, which was recently released by
the Ministry of Finance (MoF) for recommendation, aims to better manage and
collect taxes on e-commerce businesses, which have developed strongly in Vietnam
in recent years.
Besides the tax agency, it is necessary to have
close co-ordination among other relevant ministries and agencies to make tax
management more effective, according to the draft law.
Accordingly, the MoF has proposed that the tax
department will build databases and apply electronic tax services, such as
electronic tax declaration, electronic invoices and online tax payments,
ensuring that 100 percent of taxpayers will have access to these facilities to
catch up with e-commerce.
The State Bank of Vietnam (SBV) will take
measures to develop e-commerce payments and to ensure that cross-border
services pay through payment service suppliers or licensed payment intermediary
services.
The MoF will co-ordinate with SBV in guiding
commercial banks to deduct the tax that foreign social networking sites, such
as Google, Facebook and YouTube, have to pay when they transfer money from
organisations and individuals to the sites.
Under the current legal regulations, every
business or individual, regardless of having a business registration
certificate or not, that earns over 100 million VND (4,400 USD) from trading
activities, including those on social media operating as e-trading floors, must
register, declare and pay taxes.
However, tax authorities find it
challenging to tax e-commerce businesses as it is not easy to control online
business revenues given cash payment is so common in Vietnam.
Currently, individual traders mainly pay
personal income tax based on taxpayers’ declarations. To declare and pay taxes,
individual traders must register their tax codes with the tax authorities. But
online traders are reluctant to make tax declarations, while the tax
authorities’ facilities and personnel for tax inspection and collection are
limited, failing to catch up with the swift growth of e-commerce. The common
practice of cash transactions in Vietnam also makes it impossible to determine
the exact income of online shops.
In developed countries, tax enforcement and
control mechanisms are mostly based on declarations of taxpayers, but most
transactions are made via bank accounts rather than in cash, helping secure
full and accurate declaration by taxpayers.
Experts therefore suggested that State
management agencies should adopt measures to encourage online payment and
reduce cash transactions to help oversee revenues of online traders. There
should also be closer coordination between concerned authorities and
intermediary payment banks.-VNA