A Facebook page that functions as an online clothing store. Photo: Diep Duc Minh
A draft circular that envisages requiring online retailers to register with the ministry and pay taxes has drawn mixed reviews.
The Ministry of Industry and Trade circular would require e-commerce and social media site retailers to register their transactions in order to facilitate the collection of taxes, starting on January 20, 2015.
The regulation attracted broad public attention in Vietnam, where online shopping has recently flourished.
Many have questioned the extent to which the regulation is feasible.
Tran Thanh Hai, general director of Vietnam Gold Business, said it is not easy to tax retailers who use sites like Facebook because the host server is outside Vietnam and the retailers may be based overseas.
These individuals can shut down problematic Facebook pages at any time and the authorities can’t track down their owners or operators, he said.
Lawyer Nguyen Thanh Ha, chairman and CEO of S&B Law, said millions of people sell goods online using anonymous accounts, making it very hard to regulate their activities.
Developed countries with better IT infrastructure are more capable of monitoring and regulating such activity, he said.
But Nguyen Thi Thanh Nhan, the owner of Nang Ganh (a popular online restaurant in Ho Chi Minh City), hailed the regulation as “necessary” since it will protect consumers and businesses alike.
“When the sellers register with the trade ministry, they can be held responsible for their products and services, so customers will be better protected and served,” she said.
She said that many Vietnamese consumers have recently lost trust in e-commerce after receiving something that's of lower quality than what they viewed online.
How to tax?
In order to tax sellers, the trade ministry must gather information about individuals or organizations who opened accounts to run online retail businesses from the Ministry of Information and Communications, a Ministry of Finance official told Thanh Nien.
At the same time, commercial banks must monitor online shopping revenues and deduct taxes from such transactions, he said.
Le Thi Thu Huong, deputy head of the Ho Chi Minh City Tax Department, said that in order to make the regulation feasible, the ministries of trade and information, the banks, and the tax departments must work together closely.
The Ministry of Industry and Trade said it is still polling public opinions about the circular before officially issuing it.