Lawmaker proposes taxing low-value imports amid e-commerce surge

Le Quang Manh, chairman of the National Assembly’s Finance and Budget Committee, said Tuesday that the government should impose value-added tax (VAT) especially on goods sold through e-commerce platforms.

Under current regulations imported items with a value of less than VND1 million ($39.30) and shipped through express delivery services are not subject to import tax or VAT.

Manh said: "Many countries have removed the VAT waiver for low-value goods to ensure fairness between domestic and foreign companies."

The number of these goods used to be low and so taxing them was not of significance, but with cross-border e-commerce booming their numbers have skyrocketed in recent years, he pointed out.

In March 2023 almost five million packages were shipped daily from China to Vietnam, each valued at VND100,000-300,000, according to the Vietnam Posts and Telecommunications Group, Manh said.

E-commerce platforms such as Shopee, Lazada and Tiktok ship $45-63 million worth of goods per day and $1.3-19 billion per month.

Manh also had other VAT-related proposals.

Anyone doing business with revenues of VND100 million or less annually do not have to pay VAT.

But he suggested changing the limit since the country’s average per capita income has doubled since 2013 when the VND100 million amount was adopted.

Vietnam’s VAT rate of 10% is lower than many countries’, he said. The average rates are 12% in Asia, 16% in Africa and 22% in the EU, and the global average is 15%, he said.

"Vietnam has room to hike VAT to increase government revenues."

But Minister of Finance Ho Duc Phoc said the 10% VAT rate is appropriate since many businesses are now facing difficulties.