HCM City struggles to collect tax from Facebook sellers

However, many Facebook merchants are afraid that the process will not be fair.

“If paying tax is an obligation, we are ready to do it, as long as it is a fair obligation to everyone. What if I tell the truth, while other Facebook sellers lie about their revenue? They will bear less tax, which is unfair,” Thanh Huy, a Facebook seller in Phu Nhuan district, said.

Lawyer Dao Nguyen Huong Duyen said that it is difficult to find all the Facebook sellers.  She agreed that it is unfair for volunteers if authorities cannot ensure that all Facebook sellers honestly declare their tax, and the biggest challenge for tax departments is determining exactly their revenue.

Talking to newswire vnexpress, Nguyen Nam Binh, deputy director of the Ho Chi Minh City Department of Taxation, said, “We only want to know whether their business is for the long term, whether they have declared tax. If it is a long-term business activity and they have not declared their tax, we will ask them to do so.”

He added that only businesses that have revenues over VND100 million ($4,400) a year are subject to taxation. The branches at different districts are responsible for enforcing this rule. However, according to the Binh Thanh branch, no individual or organisation has come forward to work with them.

According to experts, collecting tax from Facebook sellers is not easy because an organisation or individual may have several Facebook accounts and transactions are mostly done by cash, which makes it difficult to monitor them. Besides, the Department of Taxation will try to specify Facebook sellers’ revenue by checking their sources of goods, post offices, delivery companies, and bank payments.

A leader of Binh Thanh district said that they have received the list from the Department of Taxation. However, most of the invitees did not show up.

 “If invitees continuously refuse to come, we will cooperate with local authorities to directly inspect them,” he said.

The tax department in District 3 also received the list from the Department of Taxation, however, it has decided to review all entries before approaching them.

“The list we received contained little detail, thus, we are waiting for clear guidance from the Department of Taxation, so that tax collection will be more efficient,” a leader of the District 3 Tax Department said, adding that many Facebook sellers reported virtual addresses. 

They can show an address on their Facebook accounts, but the brunt of the transactions take place someplace else. 

Besides, some Facebook sellers do not sell goods regularly, so tax departments should carefully review the list before inviting them to their offices.

According to experts, to collect tax, the authorities should understand each business, including its expenses and nature. Online businesses have their own specific characteristics. For example, it is easy to hide information about transactions made through Facebook. 

Therefore, to monitor and obtain all the necessary information of online businesses, tax departments should have enough human resources who know well about social networks.

Le Thi Thu Huong, deputy director of the Ho Chi Minh City Department of Taxation, agreed that the biggest challenge in collecting tax from Facebook sellers is to determine their revenue.

“We need cooperation and support from many related agencies, such as commercial banks, post offices, or Facebook and Zalo, to provide information about account holders,” she said.

Currently, tax departments said looking at comments and inboxes of online businesses is a way to check online transactions agreed on Facebook. However, not all of these transactions are successful, so tax departments should closely monitor them to avoid wrong tax collection.