How will Saigon track down Facebook retailers to collect tax?
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Tax officials are reaching out to 13,500 retailers in their database, but they admit this will be a very tough task.
For the first time Ho Chi Minh City has started a new tax collection campaign targeting retailers on Facebook, the most popular social network in Vietnam.
Now tax officials are working to solve an anticipated problem: how to track down thousands of retailers across the city, many of whom are elusive, and how to calculate their earnings.
Le Thi Thu Huong, a municipal tax official, said the city has a record of 13,500 retailers on Facebook and that the law only requires those with an annual revenue of VND100 million or $4,400 to declare tax.
Tax officials will also need to figure out how to determine their taxable income, Huong said, noting that cash transactions are difficult to monitored.
“Tax authorities will need the support and cooperation from relevant sectors such as banks, postal services and Facebook itself to collect tax effectively,” she said.
District-level tax agents said they have been reaching out to the 13,500 retailers in the database, but to no avail.
District 1 and Binh Thanh District have both sent out letters asking Facebook retailers to meet officials to discuss tax payments, only to find that many of the addresses listed on Facebook are fake.
“If the retailers continue to keep quiet, we will come to them in person,” an official in Binh Thanh said.
Another official said the database should be reviewed to remove inactive retailers first before district agents begin to send out requests.
“Tax authorities will need the support and cooperation from relevant sectors such as banks, postal services and Facebook itself to collect tax effectively,”
Nhung, an online retailer in Binh Tan District who sells clothes and cosmetics on Facebook, said her monthly revenue usually stays at VND30-40 million ($1,300-1,700) .
She did not hide the fact that her address and phone number are not disclosed publicly on Facebook.
“I think this is why the city’s tax department doesn’t have me in the database. So far I have not been contacted,” Nhung said. VnExpress chose not to publish her full name.
“It’s not easy for tax authorities to have my personal information, unless they contact Facebook directly. But that is not likely to happen,” she said.
Nhung also said most of her customers pay in cash.
Mai, a cosmetics seller, said she has received a letter from District 1 even though she has a business license and has declared tax.
She said she may just ignore the letter because it’s “not necessary.”
Since February, Vietnam’s tax authorities have been looking at ways to collect taxes from online businesses that use Facebook and other social media sites such as Instagram and YouTube.
Questions & Answers
Q.What is the minimum annual revenue for Facebook retailers to be required to declare tax in Ho Chi Minh City?
What is the minimum annual revenue for Facebook retailers to be required to declare tax in Ho Chi Minh City?
The law states that Facebook retailers in Ho Chi Minh City only need to declare tax if their annual revenue is VND100 million or $4,400. This threshold applies to all online sellers.
Q.Why is it difficult for tax officials to determine the taxable income of online retailers?
Why is it difficult for tax officials to determine the taxable income of online retailers?
It is difficult because many transactions are conducted in cash, which makes them hard to monitor effectively. Tax officials need support from banks and postal services to track earnings.
Q.What methods have district tax agents tried to contact online retailers?
What methods have district tax agents tried to contact online retailers?
District 1 and Binh Thanh District have sent letters asking Facebook retailers to meet officials to discuss tax payments. Some officials also plan to visit retailers in person if they remain unresponsive.