Controlling Online Business: Needing a multi-sectoral co-operation

Shopping through social networks are chosen by many consumers . Picture: Thuy Linh.

Tax collection must be started from network operators

The discovery of individuals with high incomes from the e-commerce business is not a new story, because at the Tax Department of Ho Chi Minh City, the authorities have discovered a business person on Facebook who earns billions of VND without doing tax returns in the past. The tax authorities must also use strict constraints, even if they are required to file a complaint with the police and prosecute the individual.

Facing with the fact, according to Assoc. Dr. Dinh Trong Thinh, Senior Lecturer of the Financial Academy, collecting tax from online business is relatively difficult, because the tax office can not regularly check and conduct business activities on these networks. Especially in the context of business online being a booming trend.

Moreover, despite the fact that the tax authorities have managed to source information, the monitoring of revenue and tax collection also meets difficulties due to the coordination between tax authorities and banks as well as network operators is not tight and professional.

"It is due to the lack of full management of the regulator and the combination of operators, tax authorities and the commercial banks, that cause the tax losses in online business," Assoc. Dinh Trong Thinh said.

Mr Dinh Trong Thinh also said that the collection of taxes must start from the network. Network operators have the responsibility and obligation to coordinate with the tax authorities to manage business activities, broadcast on the mass media, on social networks. That helps the management agencies to get out to online business owners.

Along with that, in order to manage the e-commerce business, there are many comments that also suggest that the Ministry of Industry and Commerce is the business registration management unit that must coordinate with the network. Basing on that, the tax authorities rely on business registration on the social network to be able to regularly monitor and manage these subjects in the same way as the monitoring of traditional business subjects.

"The collection of tax arrears like the past is just not working. It is likely that close coordination among the relevant agencies could track revenues, profits and taxes payable by these account holders, as well as for the interests of consumers." Mr Thinh pointed out.

Requesting the bank to check cash flow

Commenting on the management of this new business, Truong Thanh Duc, Chairman of the Board of Member of Basico Law Firm, said that countries around the world collecting tax from those who have made revenue from Google and Facebook has been around for a long time. Therefore, there is still confusion from management agencies.

"In Vietnam, they are still doing so spontaneously," he said. "While overseas, they have very clear rules about how to levy taxes on organizations and individuals earning income from Google, Facebook," said Mr Truong Thanh Duc.

Moreover, when things happen, the tax arrears are done by the local agency so many steps remain awkward.

In fact, in Vietnam, there are many famous people, hot facebooker ... get high income from social networking sites, YouTube. However, these incomes are mainly not declared or are not fully paid. According to many economic experts, the reason is due to the mechanism of management, supervision is not tight and confused.

Overcoming this situation, experts said that the functional agencies can immediately pursuant to the Law on Tax Administration request banks to check the flow of money transferred to Vietnam from the "big" technology companies like Google, YouTube or Facebook. Since we can get the information of individuals and enterprises receiving high income from foreign countries that do not make tax declarations, this is appropriate to find solutions, increase tax revenue.