On August 24th, the General Department of Taxation issued công văn (official letter) No. 3131/TCT-TTKT to the Tax Departments of provinces and centrally-administered cities, stipulating the review and inspection of invoices for the business market of massage chairs and similar items.
1. Current state of the massage chair market
The massage chair market has been booming in recent years, with an average growth rate of 6% per year, driven by increasing consumer demand for health care. However, due to the diverse origins and prices of massage chairs, consumers often struggle to determine their quality and the true health benefits they offer.
According to reports, on September 6th, the Ministry of Finance stated that most massage chairs sold in the Vietnamese market are imported from China. However, distributors have used deceptive advertising tactics, leading consumers to mistakenly believe the products originate from Japan or South Korea, and inadvertently falling into a price trap set by suppliers.
Recently, the media has raised the issue: "Selling massage chairs without invoices, arbitrarily declaring prices: The State loses tax revenue." Therefore, the General Department of Taxation has launched a rigorous investigation and discovered that various types of massage chairs are being distributed to the market by individuals and organizations at prices ranging from tens to hundreds of millions of VND, but many sellers do not issue VAT invoices or issue invoices that do not reflect the actual transaction value, lower than the selling price, potentially causing significant tax revenue losses for the State.
2. Implementation plan for review from the tax authorities.
Regarding the aforementioned issue, the General Department of Taxation has issued công văn 3131/TCT-TTKT directing the Tax Departments of provinces and centrally-administered cities to strictly implement a number of measures to minimize and combat revenue losses for the state budget:
- Conduct a review and classification of businesses engaged in the sale of massage chairs and similar items within the managed area. Simultaneously, assess the risk indicators of these businesses regarding invoicing and tax declarations to include them in the plan for surprise inspections and audits, and conduct inspections and audits immediately.
- For branches, representative offices, and business locations of enterprises whose head office is located in a province outside the jurisdiction of the Tax Authority, the Tax Authority needs to send a notification to the relevant provincial Tax Authority to coordinate tax management for individuals and business organizations showing signs of tax risk.
- In coordination with relevant agencies (Market Management, Customs, Finance, Industry and Trade, etc.), strengthen management measures for entities falling under the above categories to ensure fair and healthy business operations. In cases where violations of tax laws are detected, the Provincial/City Tax Departments are responsible for transferring the case file to the Police for investigation and prosecution as prescribed by law.
- The plan involves strengthening communication and dissemination activities, as well as providing support to people and businesses in the managed area regarding tax regulations and policies. Simultaneously, it warns taxpayers of the risks of intentional tax evasion, emphasizing the severe penalties imposed according to the law. This aims to raise awareness among citizens and businesses about legal compliance and reduce tax fraud and evasion.
- Provincial and city tax departments need to expand online information channels to facilitate organizations and individuals in promptly providing information and filing complaints about businesses that do not issue sales invoices.
The Ministry of Finance stated that it will coordinate with the General Department of Customs to collect information and control declared data on the origin and labeling of imported massage chairs. At the same time, the Customs Department needs to conduct regular inspections and audits to promptly detect and prevent the handling of cases where individuals intentionally commit fraud regarding origin and labeling, in accordance with regulations.
