NEW PROPOSAL REQUIRES E-COMMERCE PLATFORMS TO PAY TAXES OF SELLERS

A proposed revision to the tax law would obligate e-commerce platforms to declare and pay taxes on behalf of sellers, aiming to enhance tax management amid the rapid growth of the digital economy.

At a press briefing on September 27, Dang Ngoc Minh, deputy director general of the General Department of Taxation (GDT) announced that the revised draft of the Law on Tax Administration includes a proposal requiring e-commerce platforms to declare and pay taxes on behalf of sellers. This measure aims to strengthen the effectiveness of tax management in the growing digital economy.

Minh pointed out that the current Law on Tax Administration already mandates collaboration between various agencies, such as the State Bank of Vietnam, to assist tax authorities in collecting taxes. For instance, e-commerce platforms are currently required to provide seller information to the tax authorities.

He also noted that this proposal aligns with international practices.

"Foreign suppliers, even without a physical presence in Vietnam, already declare and pay taxes on behalf of sellers. As of now, 108 foreign suppliers, including Google and Facebook, are complying with this requirement," Minh stated.

He further highlighted that extending the same obligations to domestic platforms is essential for ensuring fairness. "If foreign suppliers can manage this process, there is no reason why local e-commerce platforms cannot do the same."

Executives from domestic e-commerce platforms have expressed confidence in their ability to comply with the proposed regulations. They confirmed that they are ready to declare and pay taxes on behalf of individual sellers, provided the policy is enacted.

Deputy Minister of Finance Nguyen Duc Chi also commented during the press conference, acknowledging the rapid expansion of e-commerce recently.

He stated, "With the explosive growth of e-commerce, it is only natural that we update our tax management methods." However, Chi emphasised that any new policies, "must be thoroughly evaluated."

The Ministry of Finance will continue to gather feedback from businesses to fine-tune the proposed adjustments.

The Ministry of Industry and Trade reported that Vietnam’s e-commerce retail market has grown consistently at 20-25 per cent annually over the past five years.

Around a decade ago, the market was valued at approximately $2.2 billion. By 2023, this figure had skyrocketed to $20.5 billion, accounting for 8 per cent of the nation’s total retail sales of goods and consumer services.

The GDT also noted that tax revenue from e-commerce has risen steadily, with contributions from both domestic businesses and international platforms such as Google, Facebook, and Amazon.

In the first seven months of this year, e-commerce tax revenue has already exceeded VND78 trillion ($3.12 billion).

Source: VIR