HCM City may tax online sales next month

The department would submit the taxing plan to the city’s government for approval early next month, an unnamed official from the department told VnExpress.

The department said it would coordinate with information and trade departments, internet providers, banks and post offices to collect the tax.

Last month, the trade department proposed the city work with Facebook on measures to collect tax from businesses running on the site.

An e-commerce site is seen on a computer and a mobile phone’s screen.

The General Department of Taxation later agreed with the proposal, saying it is working on measures to tax the businesses operating on Facebook, YouTube and Vietnamese messaging app Zalo.

Tightening tax collection from online businesses is part of a plan to enhance state budget revenue collection.

The city’s intent on taxing online sales has stirred up different opinions.

Many said the tax collection is not an easy job for the authorities as many online retailers use anonymous accounts for transactions, not to mention that most purchase or sales transaction are cash-based.

Vietnam’s e-commerce market, which has one of the world's fastest growth rates, jumped 37% to around US$4 billion in 2015, data from the Ministry of Industry and Trade show.

The growth rate is about 2.5 times faster than that in Japan, according to Tran Duc Tam, an industry expert.

The government has projected revenue by Vietnam's online retail to hit US$10 billion by 2020, accounting for 5% of the country’s retail market.

Retail sales in the first quarter of 2017 rose an estimated 9.2% from a year ago to US$40.5 billion, the government said on March 29, after an annual rise of 10.2% last year to US$118 billion.

Up to 60% Vietnam’s population is online.