According to Deputy Prime Minister Ho Duc Phoc, the draft amendment to the Law on Value Added Tax being submitted to the National Assembly proposes to tax imported goods with a value of less than 1 million VND.
According to Deputy Prime Minister and Minister of Finance Ho Duc Phoc, the non-collection of VAT on small imported goods valued under 1 million VND is being implemented by international commitments in the 1973 Kyoto Convention and specified in Decision 78 in 2010.
However, the current reality shows that other countries have abandoned this convention to reduce tax losses from e-commerce. “ Therefore, on the Vietnamese side, the Government has decided to abolish Decision 78/2010 and include a provision in the draft Law on Value Added Tax (amended) that small goods must pay tax. This is to prevent the situation of "splitting" orders under 1 million VND to avoid taxes, causing budget losses and unfair competition," said the Deputy Prime Minister.
The Deputy Prime Minister commented that the fact that the Temu e-commerce platform is becoming popular when trading goods with a value of less than 1 million VND is "taking advantage of Vietnam's Decision 78/2010 to sell cheap goods to the market".
Speaking before the National Assembly on this issue, delegate Hoang Minh Hieu (Nghe An delegation) agreed with not stipulating tax exemption for goods imported through e-commerce platforms with small value. Mr. Hieu analyzed that with the development of e-commerce, goods with small value imported have an increasingly large volume, and tax exemption for small-value goods will cause a large loss of revenue for the budget.
In addition, the situation of foreigners taking advantage of Vietnamese policies and laws to avoid taxes and enjoy incentives also causes revenue loss and directly affects domestic manufacturing and retail enterprises that comply with the law.
According to the e-commerce report for the first 9 months of 2024 by e-commerce data platform Metric, products under 200,000 VND account for more than half of the total sales of the Vietnamese e-commerce market; Vietnamese people spend 1 billion USD shopping online every month. With the effect of Decision 78/2010, Vietnam is losing tax revenue on a large amount of imported goods on e-commerce platforms.
Most recently, the Chinese e-commerce platform Temu has "made waves" in the Vietnamese market by aggressively selling cheap goods. Experts say that the retail products on Temu are cheap mainly because they cost less than 1 million VND and are exempted from import tax and value-added tax by Vietnam via express delivery. Therefore, retailers can split large orders or write prices lower than the actual price to avoid paying taxes.
(vtcnews.vn)
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