Chinese digital wallets pick Vietnamese tax pockets

By An Phuoc, Dat Nguyen    August 26, 2018 | 11:39 am GMT+7
Chinese digital wallets pick Vietnamese tax pockets
A green sign on the door of a store in Nha Trang indicates that WeChat Pay, a Chinese digital wallet service, is available as a payment method. Photo by VnExpress/An Phuoc

Vietnamese tax and provincial authorities are concerned that Chinese digital wallet services are bypassing them, easily and illegally.

A green sign is appearing on the doors of an increasing number of stores and restaurants in the popular beach destination of Nha Trang in central Vietnam.

The sign, written in both Chinese and Vietnamese, indicates that WeChat Pay, a Chinese digital wallet service, is available as a payment method at those stores.

“There are a lot of Chinese tourists in Nha Trang who shop a lot, and they use WeChat Pay, so we incorporated the service,” said a store owner.  

According to local tour guides, some Vietnamese store owners have bank accounts in China, so money will be transferred directly to those accounts, not to Vietnam.

This payment method, which is also popular in Da Nang and Ha Long Bay – other hotspots for Chinese tourists, has raised concerns of tax losses for Vietnam, with tax authorities having no control over such payments.

On Wednesday, the provicial administration of Khanh Hoa, where Nha Trang is located, said that they had sent a letter to the Government Office asking for solutions to manage these kinds of e-payment.

Tran Son Hai, Deputy Chairman of the People’s Committee of Khanh Hoa, said in the letter that there were signs of law infringement when Chinese tourists paid with the Chinese yuan, or used certain points of sale (POS) and Quick Response (QR) code via smartphones. 

It was difficult to control these payment methods as there are no invoices when a tourists use the QR code, the letter said. Identifying which POS device is legal or illegal is difficut, it added

Khanh Hoa authorities proposed that technological solutions are identified and specific regulations issued to control these payment methods. 

Catching up

It is illegal to have WeChat transactions in Vietnam as Vietnamese banks do not officially connect with this service, said Nguyen Duc Hien, deputy director of the Quang Ninh branch of the State Bank of Vietnam.

Quang Ninh is the province where Ha Long Bay is located.

Transactions from one e-wallet to another on WeChat cause tax losses as they are not controlled by any Vietnamese bank, Hien told local press.

As in Khanh Hoa, Quang Ninh authorities are also finding that they have no control over such payments.

“We can only tell the store owners not to participate in this illegal payment method or to voluntarily disclose their transactions to limit tax losses,” said Ho Quang Huy, Vice Chairman of the People’s Committee of Ha Long City.

“It is a 4.0 world, there are matters that the government has not caught up with yet,” he added.

‘Zero dollar’ tours

This is not the first time that Vietnamese authorities have expressed concerns about the activities of Chinese tourists, whose numbers have been increasing every year.

In the first three months this year, hundreds of thousands of Chinese tourists entered the country through the Mong Cai International Border Gate in northern Vietnam.

Officials at the border said that the influx was a result of the “zero dollar” tours, a form of marketing which allows Chinese tourists to travel with free accommodation and meals.

Such tourists are forced to do their shopping at “Chinese customers only” stores for prices a few times higher than the market rate.

These stores are owned by Vietnamese nationals but are actually operated by Chinese investors, and their operations are very hard for authorities to control, one official at the Mong Cai International Border told VnExpress.

Last year, 15 of these stores were closed after Prime Minister Nguyen Xuan Phuc asked Quang Ninh Province to verify press reports. 

The media called them “secret stores” since they are always packed with Chinese tourists and Vietnamese locals are not allowed in.

Chinese account for a large number of international tourists coming to Vietnam every year.

In the first half this year, Vietnam welcomed 2.5 million Chinese visitors, or 32 percent of total number of international arrivals, a year-on-year increase of 36 percent.

 
 
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