Maximizing Online Business Tax Revenue: A Robust Strategy

According to the Tax Department of the Ministry of Finance, tax authorities at all levels have been reviewing, collecting information, and data on taxpayers engaged in e-commerce and digital platform businesses to support tax administration.

The tax industry collaborates with relevant agencies to handle cases related to tax evasion, counterfeiting, and trading of substandard goods associated with e-commerce and digital platform businesses.

However, alongside businesses and traders who diligently abide by tax laws, there remains a portion of non-compliant entities. These include those who have not registered their businesses, have not registered for taxes, under-declared their revenues, or failed to fulfill their tax obligations arising from e-commerce and digital platform activities.

In a recent open letter to taxpayers, the tax authority advised business owners, legal representatives of enterprises, and representatives of e-commerce and digital platform businesses to proactively learn about tax regulations and comply with tax registration, declaration, and payment requirements.

Individuals already engaged in e-commerce and digital platform businesses but have not registered for taxes are urged to promptly register, declare, and pay taxes fully, on time, and in accordance with tax regulations.

In cases where taxpayers do not cooperate, the tax industry will inspect and strictly handle acts of non-compliance or incomplete fulfillment of tax obligations as stipulated.

For deliberate non-compliance, the tax authority will compile case files and transfer them to competent investigative and judicial agencies to handle tax evasion acts according to the law.

According to the Tax Department, in the first four months of the year, tax revenue from organizations and individuals engaged in e-commerce activities reached VND 42,600 billion, a 10.4% increase compared to the same period in 2024.

From April 1st, e-commerce platforms will be responsible for withholding and paying taxes on behalf of individuals and households conducting business on their online platforms. This is stipulated in the amended Law on Tax Administration, which has been passed by the National Assembly.

Data from Metric.vn, a data analytics platform, shows that in the first quarter of this year, the total market turnover of Vietnam’s e-commerce market exceeded VND 101,000 billion, a 42.29% increase compared to the same period last year. The consumption volume reached 950.7 million products, a 24% increase year-on-year.

There were 78 sellers with a turnover of over VND 50 billion, almost doubling the number in the first quarter of 2024. More than 1,000 online stores had a turnover of over VND 10 billion. This reflects a clear market polarization, with small retailers gradually leaving the market and making way for larger players.

Market share changes were also observed among the major e-commerce platforms. TikTok Shop’s sales grew by 113%, increasing its market share from 23% to 35%. Shopee grew by over 29%, capturing 62% of the market. Meanwhile, Lazada and Tiki lost 43.5% and 66.6% of their sales compared to the previous year, respectively.