Vietnam’s transport authorities have issued a warning to Uber, saying the low-cost ride-hailing service provider is trying to avoid paying tax.
Official statistics show there are currently about 4,000 Uber minicabs in Ho Chi Minh City, and transport authorities estimate that Uber Vietnam could earn VND30 billion ($1.3 million) in revenue per month from the 20 percent commission that Uber drivers have to pay for each ride.
Uber has so far claimed that it is an internet-based technology platform rather than a transport firm to avoid sales tax.
“Although Uber drivers registered as household businesses that can earn a monthly income of tens of millions of dong (VND1 million = $45), most of them avoid paying personal income and value-added taxes,” said Nguyen Hong Truong, deputy minister of transport. He added that the government has yet to fully legalize ride-sharing Uber.
In an attempt to regulate low-cost ride-hailing services, the Ministry of Transport has compiled a list of transport companies which offer services with fleets of nine-seat minicabs without roof signs.
According to the report, Grab Taxi, a Malaysia-based company, has been running a hailing app on a trial basis in five Vietnamese cities using both traditional taxis and unmarked minicabs.
Transport authorities have recently allowed Vinasun, a major taxi firm in the country, to launch its own hailing app.
Uber, however, has been singled out by transport authorities for providing ride-hailing services without legal permission.
Transport authorities in Hanoi and Ho Chi Minh City, where most Uber drivers are based, will step up their efforts by working together with tax officials to investigate individual drivers.
The results of the investigation will be released before September 20.
According to Vietnamese authorities, Uber drivers should pay value-added tax and personal income tax because their ride-hailing services are taxable activity.