HCM City faces troubles in collecting online sales taxes

HCM City Department of Taxation started collecting taxes from online businesses a year ago, however, many businesses haven't paid their taxes as requested.

HCM City Department of Taxation started collecting taxes from online businesses a year ago, however, many businesses haven't paid their taxes as requested.

   

HCM City faces troubles in collecting online sales taxes

Since mid-2018, HCM City authorities started collecting taxes from online businesses on Google, Facebook and Youtube. Many online sellers, Youtubers and mobile app developers were able to earn billions of VND and haven't paid taxes for a long time. HCM City Department of Taxation asked nearly 14,000 businesses to pay taxes. It is estimated that some businesses would be liable to pay VND100m in tax each year.

However, rarely anyone visited the tax offices as requested. Nguyen Thanh Tung, head of Tan Phu District Department of Taxation, said they were only able to collect VND2bn in tax arrears from a single account. Phu Nhuan District is considered to have the largest number of online businesses in HCM City but they have also been unable to collect taxes.

Nguyen Nam Binh, deputy head of HCM City Department of Taxation, admitted that the revenues from taxes and tax arrears hadn't met the expectation. It is expected that they would be able to collect hundreds of billions of VND while in reality there were only three major taxpayers and several taxpayers in Phu Nhuan District.

One person paid VND4.1bn (USD176m) in taxes after receiving VND41bn from Google and Facebook. An account holder from Quang Nam Province paid VND3bn in taxes on a VND30bn revenue. Another major taxpayer paid VND2bn in taxes.

According to Binh, they failed because they were unable to verify the account holders' information and there currently are no legal measures to force them to pay taxes yet. After the Taxation Law is adjusted, there would have stricter measures to deal with the situation.