Vietnam’s youth become millionaires off Facebook, Google

By Hung Le   February 6, 2021 | 07:58 am GMT+7
Vietnam’s youth become millionaires off Facebook, Google
Facebook and Google logos are seen in this combination photo. Photo by Reuters.
Tax authorities are finding more and more young people earning millions of dollars from online commerce and social media sites.

The Hanoi tax department recently revealed that two individuals had filed tax returns on incomes of millions of dollars.

The first, a 28-year old woman in Cau Giay District, declared an income of VND330 billion ($14.35 million) in 2020 from writing software and selling it on Google Play and App Store and paid VND23.4 billion in tax.

A 30-year old man, also in Cau Giay, declared an income of VND260 billion from selling software to clients around the world and paid VND18.1 billion.

They paid taxes at the minimum rate of 7 percent of gross income made up of 5 percent VAT and 2 percent personal income tax.

In Cau Giay District, 65 individuals doing business online paid VND55 billion in taxes last year, Le Quang Hung, head of the district tax office, was quoted as saying by Vietnam Television.

These are not the first to earn huge incomes on online platforms such as Google, Facebook and YouTube.

One of the first was game developer Nguyen Ha Dong, whose game Flappy Bird clocked 50 million downloads on Android and iOS app stores within seven months of its release.

Dong claimed he made over VND1 billion, or $50,000, a day between May 2013 and January 2014 from advertising revenues, equivalent to over VND300 billion a year.

Huynh Kim Tuoc, Facebook’s representative in Vietnam, said at a forum on the country’s e-commerce panorama in 2017 that there were some 50 dollar millionaires operating on the platform at the time, most of them just 19-20 years old.

This number could double in future, he said.

With the Covid-19 pandemic spurring consumption of online content and e-commerce, the number of people earning in the millions of dollars through social networks, YouTube or selling good online has almost certainly increased.

"50 web millionaires, or maybe hundreds by now, is still not a large number," a member of the Vietnam E-commerce Association (VECOM) said.

"The e-commerce market in particular and the digital economy in general are opening up opportunities for young people to make a lot of money."

Media analytics firm SocialBlade estimated based on views and potential ad earnings that as of January at least five channels belonging to individuals were generating an income of $1 million a year.

Two streamed online games, one recorded real-life pranks and media skits, another produced entertainment videos for children, and the last one belonged to celebrity music artist Son Tung M-TP.

Taxes and opportunities

The proliferation of online revenue sources caused some problems for tax authorities. In 2018 they discovered over $21 million had been sent to bank accounts of individuals, groups and organizations by Facebook, Google and Youtube.

Such income was classed as private business income, and tax authorities slapped the individuals with back taxes and late payment fees and fines, prompting the latter to make public statements urging others to proactively pay taxes on online earnings.

"Tax agencies are now regularly collecting from people with incomes from Google and Facebook," Dang Ngoc Minh, deputy director of the General Department of Taxation, had said at a press conference last December.

"In 2019 and 2020, the amount of tax collected from individuals was approximately VND1 trillion.

"There are cases where taxpayers make self-declarations, but others require the intervention of tax authorities to collect arrears. In future revenues from this source will be high."

A new regulation that came into effect in December empowers tax authorities by requiring banks to provide account data, including balances and transactions, at the request of tax authorities to help them assess taxes.

Some experts also called on authorities to not just collect tax from these people but also create favorable policies to support them.

Vu Hoang Lien, chairman of the Vietnam Internet Association, said a major problem is the lack of a clear legal framework.

"The Government has preferential policies for information technology businesses, especially software businesses, but there are no incentives for individuals with creative activities on the Internet."

There should also be regulations to manage Google, Facebook and YouTube, which would help protect people offering services on the platforms, he said.

This would encourage individuals to participate in online production, focus on innovation, achieve high income, and pay taxes, he added.

Concurring, Huynh Phuoc Nghia, deputy director of the University of Economics Ho Chi Minh City’s Institute of Innovation, said a legal framework to encourage and support innovation by individuals is needed.

"The government should consider creating training programs related to the digital economy and digital content, helping newcomers enter the market and regulate this activity."

Digital commerce trends have allowed individuals to easily access the global value chain, creating better opportunities for those without advanced degrees to offer digital content and achieve higher incomes than from traditional business models, he said.

"The future of the global economy is digital and technology, and Vietnam should capitalize on that to become a new kind of global factory, with individual programmers writing software for the world to use."

According global data firm Statista, by mid-2020 Vietnam had more than 69 million Facebook users, accounting for 70 percent of its population and the seventh highest in any country.

The Ministry of Information and Communications said around 120,000 people are registered to make videos on YouTube, including 15,000 monetized channels, and there are 350 channels with over a million followers.

 
 
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