Talking to Lao Dong Newspaper, Dr. Nguyen Ngoc Tu - former Director of the General Department of Taxation, former Editor-in-Chief of Tax Magazine, currently a lecturer at Hanoi University of Business and Technology, said that although the draft has many advances, there are still major difficulties in managing and supervising e-commerce business activities.
Tax control in e-commerce is not as easy as traditional business
According to Dr. Nguyen Ngoc Tu, one of the core issues of tax collection from e-commerce is determining the actual revenue of business households and individuals selling on digital platforms.
In traditional business, tax management is much easier because business households have a clear address, signs, tax codes, and operate according to certain legal procedures. Meanwhile, many individuals doing business on e-commerce platforms do not have a fixed address, do not register for business or do not fully declare taxes, Mr. Tu analyzed.
Mr. Tu said that currently, transactions on e-commerce platforms are very diverse, not always taking place on digital platforms. A large number of transactions are still being conducted off the stock exchange. Selling and buyers can contact directly and pay in cash through the shipper. At that time, the tax authority could almost not control this cash flow," he said.
The Ministry of Finance is proposing a mechanism for tax deductions at source, accordingly, e-commerce platforms will deduct and pay taxes on behalf of sellers before transferring money to them. However, according to Mr. Tu, this measure is only feasible if 100% of transactions are conducted on the floor and payments are not made in cash. If sellers and buyers agree to pay off the stock exchange, the tax deduction mechanism will become ineffective, Mr. Tu added.
Coordination is needed between the parties to avoid tax losses. In addition to requiring e-commerce platforms to fulfill their tax deduction obligations, Dr. Nguyen Ngoc Tu emphasized that there needs to be coordination between many agencies to manage taxes more effectively.
"We cannot only rely on e-commerce platforms, but need the participation of tax authorities, local authorities, banks and payment intermediaries," Mr. Tu suggested.
Mr. Tu analyzed that if an online business household has a large warehouse but does not declare taxes, the local government must grasp the information and report to the tax authority for handling measures. At the same time, banks and payment intermediaries can also play a role in monitoring cash flow and supporting revenue control from e-commerce platforms.
Mr. Tu said that technology needs to be applied more strongly in tax management. "We cannot control it by manual measures. It is necessary to develop a Big Data system and artificial intelligence (AI) to analyze online transactions, identify subjects at risk of tax evasion and monitor business activities on digital platforms, Mr. Tu emphasized.
Avoid creating more burdens for businesses
Another issue that this expert is concerned about is the responsibility of e-commerce platforms in collecting taxes. According to the draft Decree, e-commerce platforms will be responsible for declaring, collecting and paying taxes on behalf of individuals doing business on their platforms. However, Mr. Tu commented that if there is no appropriate support mechanism, this could become a burden for e-commerce platforms.
E-commerce platforms are not tax authorities. They are also businesses, if they are required to collect taxes without support for operating costs or compensation mechanisms, this can affect their business operations, said Mr. Tu.
He proposed that the Ministry of Finance should consider a model of compensation for collection costs for e-commerce platforms, similar to the current method of tax collection by post office. This helps reduce pressure on businesses and ensure a more realistic tax collection mechanism.
Strengthen supervision but there must be a reasonable roadmap
Overall, Dr. Nguyen Ngoc Tu highly appreciated the efforts of the Ministry of Finance in perfecting the e-commerce tax collection mechanism. However, he emphasized that implementation requires flexibility.
It is impossible to immediately apply a mechanism that is too rigid without preparation for technical infrastructure, human resources and business support policies. If not done well from the beginning, it can cause negative reactions from the market and slow down the digitalization of the economy, Mr. Tu warned.
According to Mr. Tu, instead of applying it nationwide, it is possible to pilot it first at some major e-commerce platforms, then assess the feasibility and gradually expand. In addition, there should be a mechanism to encourage business households to proactively declare taxes instead of only using administrative measures to impose them.
Concluding the issue, Dr. Nguyen Ngoc Tu affirmed: Tax collection from e-commerce is inevitable in the context of a strong digital economy. However, it is important to have a reasonable and transparent implementation mechanism, avoiding creating burdens for businesses and ensuring fairness between online and traditional business".
The Ministry of Finance plans to complete the draft Decree based on comments and submit it to the Government for consideration in the coming time. If the problems of e-commerce tax management are not thoroughly resolved from the beginning, the risk of tax loss will continue, while affecting the healthy development of the Vietnamese e-commerce market.
