This strong increase came not only from domestic enterprises but also from international platforms like Google, Facebook, and Amazon. However, the flexibility of e-commerce poses many new challenges for tax management.
Rapid growth but significant challenges
Speaking at the seminar themed "Enhancing the effectiveness of tax management for e-commerce", Tran Minh Tuan, Director of the Digital Economy and Society Department under the Ministry of Information and Communications (MoIC), affirmed that after the Prime Minister issued Directive No.18 on strengthening data connectivity and sharing to support e-commerce development, prevent tax losses, and ensure monetary security, the MoIC quickly implemented a plan with seven groups and 25 specific tasks. They assigned responsibilities to various units within the Ministry to support the General Department of Taxation in the tax collection process related to e-commerce activities.
According to Nguyen Thi Lan Anh, Director of the Tax Management Department for Small and Medium Enterprises, Household Businesses, and Individuals under the General Department of Taxation (Ministry of Finance), the General Department of Taxation has been implementing synchronised and unified solutions to enhance the effectiveness of tax management for e-commerce activities. At the same time, the tax sector has continued to provide electronic tax services to support tax declaration and payment at Level 4.0, ensuring that taxpayers can register for taxes, declare taxes, and provide information entirely electronically.
Lan Anh emphasised: “With the goal of placing citizens and businesses at the centre as the subjects, objectives, and driving force of digital transformation, the General Department of Taxation has been continuously expanding the implementation of electronic tax services, including tax declaration, tax payment, and electronic tax refund at Level 4.0, while supporting taxpayers in searching for information on their tax obligations to facilitate compliance for all taxpayers, especially those in e-commerce.”
Citing and analysing data, Lai Viet Anh, Deputy Director of the E-Commerce and Digital Economy Department under the Ministry of Industry and Trade, stated that the rapid and robust development of e-commerce has significantly contributed to the development of a relatively modern trade model in recent years, especially during the COVID-19 pandemic when social distancing measures reduced contact between individuals.
This method is highly effective for distributing goods and services to end consumers. However, with the rapid growth, it is necessary to ensure development is sustainable. This means ensuring fair competition and compliance with the law by market participants, particularly regarding tax obligations.
“To enhance tax management effectiveness, one key aspect is building a comprehensive management database and applying information technology in management operations. Our management activities must optimally utilise online and electronic tools,” stated Lai Viet Anh.
Using digital technology to manage e-commerce
From the perspective of an economic expert, Assoc. Prof. Dr. Dinh Trong Thinh views e-commerce as a new form of business globally, one that is changing swiftly, with new business models emerging at a rapid pace. Therefore, managing e-commerce poses many challenges. Ensuring accurate and sufficient tax collection from e-commerce activities has become a common difficulty for most tax authorities worldwide, including highly developed tax agencies in the US and the European Union.
Assoc. Prof. Dr. Dinh Trong Thinh highly appreciated the efforts and initiatives of relevant authorities in coordinating the management of e-commerce activities. Particularly in recent times, with the introduction of VNeID by the Ministry of Public Security, the integration of data from numerous agencies has been facilitating not only the General Department of Taxation's management of e-commerce but also improving the management of other areas related to both the economy and society. These are collective efforts of various agencies in the digital economy, contributing to the determination to comprehensively build a digital economy.
According to Assoc. Prof. Dr. Dinh Trong Thinh, some immediate and urgent tasks include perfecting mechanisms and policies and building large databases and data warehouses, as this will not only serve the tax authorities in ensuring accurate and sufficient tax collection but also protect consumer rights and social security.
Additionally, the application of technology is essential. It is crucial to use new and digital technology to manage e-commerce activities. Moreover, there is a need for campaigns to encourage businesses to voluntarily comply with tax obligations accurately and completely.
To enhance the effectiveness of tax management for e-commerce, experts proposed a series of solutions and recommendations, emphasising the need to continue developing and refining a comprehensive legal framework regarding taxes that is specific and applicable to each subject, ensuring compatibility with international practices and the unique characteristics of Vietnam.
It is necessary to supplement legal regulations to enhance the responsibility of organisations owning e-commerce platforms, requiring platforms with online ordering functions to be responsible for withholding tax declarations and paying taxes on behalf of individual businesses on the platform.
Strengthening coordination with ministries and sectors to share and connect data for tax management in e-commerce activities is crucial. In addition, propaganda and dissemination of legal information to business entities are needed to ensure businesses clearly understand the legal regulations and related obligations, and to guide them in complying with tax obligations while conducting online business.
If accurate and comprehensive information campaigns are conducted but businesses continue to violate e-commerce and tax laws, stricter measures must be taken, such as revoking websites, cancelling licenses, and imposing severe penalties according to legal regulations.
Additionally, enhancing the responsibility to withhold and pay taxes on behalf of sellers at the source from e-commerce platforms with online ordering functions is necessary, while also increasing the responsibility of e-commerce platforms and service providers to provide information.
Further implementation of electronic invoices is crucial, as this ensures fairness and equality among all participants, both in e-commerce and traditional activities, while also protecting consumer rights by providing invoices for complaints and feedback, thus ensuring the best e-commerce operations.
While much work remains to be done for management, e-commerce continues to develop like "a storm". Human resources, in some situations, are nearly "out of breath" in the face of technological advancements. If the flexibly is not adapted alongside technological applications, managing a large market will become increasingly challenging.
