Prevent tax loss through e-commerce platforms

Enhancing the application of risk management in tax administration and preventing tax loss

Managing goods on e-commerce is a big challenge for the authorities.

Be concerned about product quality

In the last days of 2023, the Market Surveillance Department of Ho Chi Minh City continuously discovered many places selling fake and pirated goods through online platforms. The Department coordinated with Team 6 - Economic Police Department of Ho Chi Minh City Police to inspect 6 business establishments in districts 5, 6, 8, 11, temporarily seizing nearly 90,000 smuggled products of unknown origin and there are signs of trademark counterfeiting worth more than 1.6 billion VND.

Ho Chi Minh City Market Surveillance Department said that in 2023, the unit has sanctioned 77 cases related to e-commerce business, discovered thousands of fake products, smuggled goods, goods of unknown origin, etc with a fine of nearly 2 billion VND. Many subjects have been punished, but because the business of counterfeit and smuggled goods brings huge profits, it continues to recur.

Similarly, recently, in Hanoi, from famous online sales accounts on many social platforms, the authorities conducted an inspection of a warehouse located in Do Nghia urban area, Yen Nghia ward, Ha Dong district, Hanoi. Inspection results showed that the goods in the warehouse were mainly cosmetics, functional foods, household and consumer goods, etc. According to information on the box, these products originated from Korea, America, Canada, etc but most of them do not have additional labels in Vietnamese, the origin is unknown.

On January 2, 2024, the Market Surveillance Department of Ba Ria - Vung Tau province said that the unit had just coordinated with Xuyen Moc district police to inspect the goods gathering point of business household Tran Thi Thanh Hoai (Xuyen Moc district, Ba Ria - Vung Tau province) and discovered hundreds of product codes ranging from clothes, shoes to cosmetics, and functional foods of unknown origin. The business owner declared that all goods were imported from Ho Chi Minh City and sold on social networking platforms in the form of livestream.

These are not rare events. In recent times, it has been quite common for some individuals to take advantage of their personal pages to livestream to sell fake and low-quality counterfeit goods in large quantities.

Sharing at the recent 2023 Work Summary Conference, Mr. Tran Huu Linh, General Director of the General Department of Market Surveillance, said that in 2023, the country's Market Surveillance force detected over 52,000 violations, an increase of 16% compared to last year 2022. Through inspection activities, the results of handling violations, combined with propaganda and media work, it shows that in 2023, the phenomenon of publicly selling smuggled goods, counterfeit goods, of unknown origin, goods infringing intellectual property rights have decreased; Business entities' awareness of compliance with the law has been enhanced.

However, along with trade activities increasingly expanding and developing, violations in trade activities, especially in the e-commerce environment, are still increasing and facing many difficulties and challenges.

Tighten management, avoid tax revenue loss

Not only concerned about the quality of goods, e-commerce activities pose a problem for tax management authorities to create budget sources as well as ensure a fair and healthy business environment, thereby promoting economic development.

A representative of Ho Chi Minh City Tax Department said that Ho Chi Minh City currently has 267 e-commerce platforms that are required to provide information. By the end of the third quarter of 2023, there were 34,900 taxpayers with a total transaction value of more than 14,500 billion VND, revenue from e-commerce increased 14 times compared to the same period in 2022.

However, e-commerce floor owners have not yet provided complete information about organizations and individuals doing business on the exchange. In addition, converting "virtual" information of individuals doing business on social networks into real information such as citizen identification cards and phone numbers; The delivery unit has not or cannot provide the name and tax code of the organization or individual selling the goods for tax management.

For organizations and individuals residing in the country that generate income from providing cross-border services on digital platforms (digital content production, digital applications via Google, Facebook, Netflix, etc), agencies Tax sent requests to 56 banks but only 15 banks responded. These are challenges for the tax sector in collecting taxes on online businesses.

In 2023, Ho Chi Minh City has reviewed nearly 5,900 individuals and business households on e-commerce platforms, collected and fined more than 217 billion VND for violations, an increase of 29% compared to 2022.

Faced with the above situation, in 2024, the Ho Chi Minh City Tax Department proposes to develop inter-ministerial coordination regulations in providing e-commerce information. At the same time, build a specific tax management process to facilitate tax management. In addition, promote inspection and examination of businesses that are e-commerce platform owners, businesses that operate as transportation intermediaries and payment intermediaries, etc.

Data on the e-commerce portal of the General Department of Taxation is an important data source to help the unit promote review with the number of taxpayers increasing nearly 35 times and increasing the amount of back taxes and fines by more than 140 billion VND compared to 2022.

On December 15, 2022, the General Department of Taxation opened the E-commerce Information Portal to receive information about e-commerce. Until now, after 4 periods of providing information, this portal has recorded 357 e-commerce trading floors providing information. Accordingly, the number of individuals and organizations participating in business on the floor is currently more than 191,000 with a total transaction value of nearly 59,000 billion VND.