Tax officials to act as customers to track down tax-evading retailers on Facebook

By Van Anh - Jul 11, 2017 | 02:53 PM GMT+7

TheLEADERTax Department of Ho Chi Minh City has decided to adopt practical measures to collect taxes from online retailers on Facebook.

Tax officials to act as customers to track down tax-evading retailers on Facebook
Vietnam still struggles to monitor business activities on Facebook. (Photo: Campfire Capital)

According to the Taxation Department of Ho Chi Minh City, after over a month of tax collection campaign, only about 1,000 out of 13,500 contacted retailers have shown up and willingly cooperated. Among these 13,500 retailers, only those earning an annual revenue of VND100 million ($4,400) are required to invoice and pay tax.

After a comprehensive insight into the business environment on Facebook, tax officials recognise that retailers have found various ways to evade their tax liability. The most common methods are creating fake accounts and pages, concealing product prices, changing business locations,…

To overcome these obstacles, the Taxation Department of Ho Chi Minh City decides to take tough measures. Tax offices will get a detailed record of Facebook retailers from the State Bank of Vietnam to collate figures and collect taxes. Municipal tax officials are allowed to act as customers to approach and track down the violated retailers, whose names will be published. If they keep avoiding their responsibility, the Department will request the Ministry of Information and Communications to close their accounts.

In reaction to this decision, many online retailers doubt the capacity of taxation bodies for implementing these measures. Facebook only acts as an environment for displaying and advertising the products, hence, it is difficult to correctly detect the revenue of online shops. Besides, fresh produce like fruit comes in season, causing difficulties in issuing tax invoice.

Vietnam is still struggling to monitor the business activities on the transactional business environment like Facebook and Google without specific tax policies for online businesses.