Ho Chi Minh City may tax online sales next month

Ho Chi Minh City’s tax department has said it will work with related departments to impose sales taxes on businesses running on Facebook and other online shopping sites.

The department would submit the taxing plan to the city’s government for approval early next month, an unnamed official from the department told VnExpress.

The department said it would coordinate with information and trade departments, internet providers, banks and post offices to collect the tax.

Last month, the trade department proposed the city work with Facebook on measures to collect tax from businesses running on the site.

The General Department of Taxation later agreed with the proposal, saying it is working on measures to tax the businesses operating on Facebook, YouTube and Vietnamese messaging app Zalo.

Tightening tax collection from online businesses is part of a plan to enhance state budget revenue collection.

The city’s intent on taxing online sales has stirred up different opinions.

Many said the tax collection is not an easy job for the authorities as many online retailers use anonymous accounts for transactions, not to mention that most purchase or sales transaction are cash-based.

Vietnam’s e-commerce market, which has one of the world's fastest growth rates, jumped 37 percent to around US$4 billion in 2015, data from the Ministry of Industry and Trade show.

The growth rate is about 2.5 times faster than that in Japan, according to Tran Duc Tam, an industry expert.

The government has projected revenue by Vietnam's online retail to hit $10 billion by 2020, accounting for 5 percent of the country’s retail market.

Retail sales in the first quarter of 2017 rose an estimated 9.2 percent from a year ago to $40.5 billion, the government said Wednesday, after an annual rise of 10.2 percent last year to $118 billion.

Up to 60 percent Vietnam’s population is online.