The Ho Chi Minh City Department of Industry and Trade announced that it will coordinate with the City Tax Department to begin discussions on solutions for collecting sales tax on Facebook sales this month.
Following the discussion last month about taxing sellers on Facebook, the Ho Chi Minh City Department of Industry and Trade announced it is actively pursuing specific measures. Director Pham Thanh Kien affirmed that combating tax evasion is a major issue currently facing the city's budget revenue. He noted that e-commerce activities, particularly business on Facebook, have not been strictly controlled by state agencies.
“The Department of Industry and Trade is actively discussing with the Tax Department about solutions to manage e-commerce business, especially business on Facebook. However, this issue requires time because it's not simply about collecting data and seeing what people are buying and selling, but also depends on technology to manage this website. This March, we will sign a cooperation agreement with the Tax Department on solutions for implementation,” Mr. Kien said.
According to this source, the specific solution will be announced as soon as the relevant agencies have finished their discussions and submitted it to the city leaders for approval. At that time, the top priority will still be to encourage self-awareness among sellers on Facebook through various media channels.
Previously, during a meeting between Ho Chi Minh City leaders and the Tax Department in February 2017, the Department of Industry and Trade proposed finding a mechanism to collect taxes on business activities on Facebook. This proposal was later confirmed as well-founded by the General Department of Taxation. The Tax Policy Department of the General Department of Taxation is also researching tax management for business activities on social networks, specifically Facebook, YouTube, Zalo, etc.
According to many experts, taxing sellers on Facebook will not be simple. Each organization or individual can currently own multiple accounts on the social network for business purposes. Since most transactions are conducted using cash, monitoring is difficult. This is not to mention the challenge of differentiating between businesses using Facebook for various purposes – consulting, marketing, or selling products and services. Furthermore, how should taxes be managed for those who conduct business on Facebook as a part-time job or to supplement their income?
For the time being, the general direction of the tax authorities is to require businesses operating on social media to provide information such as name, address, phone number, personal tax identification number, etc., in order to more closely control this form of business.
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