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Ho Chi Minh City official wants to tax Facebook shops

Monday, February 20, 2017, 17:00 GMT+7

The Ho Chi Minh City taxman should consider collecting taxes from an increasing number of people who are selling their stuff through Facebook to ensure budget revenue, the municipal industry and trade department has said.

Finding solutions to reduce tax losses for the municipal budget and to tax online traders was high on agenda at a meeting between the city’s administration and several departments and agencies on Sunday.

Speaking at the meeting, Pham Thanh Kien, director of the industry and trade department, said e-commerce has been booming in Ho Chi Minh City in the last three years.

“There are now 80,000 e-commerce websites registered in the city, half of which run stable operations,” Kien said.

However, Kien admitted that it is difficult to oversee the revenue of these platforms, even when authorities know where the electronic traders put their website servers.

In recent years, many people have also turned to Facebook to advertise and sell a number of products, Kien said, adding that it is even harder to tax these ‘Facebook traders’.

“I suggest that the municipal administration work with Facebook to have their support in monitoring the revenue from sales conducted via the social network,” he said.

The world’s largest social networking site currently allows users to add a shop section to their Facebook Page to sell products right from the Page.

Any individual Facebook user is also able to run ads for their products on their personal profile as a free yet effective marketing channel.

In both cases, local tax bodies are powerless to oversee the transactions and charge the sellers any tax.

At Sunday’s meeting, the Ho Chi Minh City tax department did not comment on the suggestion from its trade counterpart.

However, Tran Ngoc Tam, head of the city’s taxman, has previously said that it is not easy to tax online traders or Facebook businesses, pointing to a number of reasons.

The main reason, he was quoted by the Saigon Times Online as saying on February 6, is the Vietnamese habit of using cash.

“You may browse goods and place orders online but will eventually pay in cash,” Tam said.

“This makes it difficult for tax agencies to know the exact revenue of the online traders, even when they have all papers and receipts for those transactions.”

Tam admitted that with those who sell stuff via Facebook, “tax authorities can start inspecting their business, but it is a different story if we can really verify the scale of their revenue and profit.”

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