Tax from online ads on Facebook, Google in Vietnam hits US$42.8 million
|Vietnam’s customs revenue projected to reach $13 billion in 2020|
|Tax collection meets nearly 86% of year’s estimate|
|Tax collection hits over VND200 trillion in southern hub|
|The total amount of tax paid by individuals who have conducted transactions through Google and Facebook platforms during the 2019-2020 period reached some 1 trillion VND (roughly US$42.8 million USD). Photo: KT|
According to Dang Ngoc Minh, Deputy General Director of the General Department of Taxation (GDT), those individuals have made tax declaration and payment voluntarily, or been defined by tax agencies.
The effects of the COVID-19 pandemic have led to changes in traditional business forms, he said, noting that digital business has posted a sharp rise.
People have moved towards online shopping and entertainment activities, and cashless payment. Meanwhile, enterprises have shifted their operation towards digitalisation, Minh went on.
The official predicted that the figure will continue to increase in the time ahead thanks to the rapid development of digital economic services.
“Together with the global trend, Vietnam would take the lead in digital economic services, which is expected to facilitate domestic business and production this year,” he said. “This is a good premise for the development of the digital economy, as well as the expansion of the country’s revenue in the future.”
Minh, however, pointed out challenges brought about by the new business model to both firms and tax agencies.
Given this, the GDT has instructed tax agencies to establish working groups to study virtual business systems, while joining hands with market management units and payment intermediary companies to seek solutions in order to manage revenue sourced from digital services, he said.
|Dang Ngoc Minh, Deputy General Director of the General Department of Taxation. Photo: VOV|
Minh has regarded the legal corridor and technological assistance as the most important factors to tax management, explaining that they would help to prevent tax avoidance.
The department has also adopted new regulations on digital management, especially cross-border transactions, and plans to issue a number of circulars stipulating the responsibility of parties in tax administration.
For foreign businesses providing platforms in Vietnam, the agency intends to work with consulting and auditing companies to invite businesses, including: Netflix, Amazon, Google and Youtube to discuss tax obligations and administration methods under the new regulations.
Minh added that tax authorities would coordinate with banks to trace back abnormal income of individuals and businesses on social networks such as YouTube, Google and Facebook.
Those who avoid paying taxes will receive administrative fines, and even face criminal prosecution, he warned./.
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