The Ho Chi Minh City tax department has proposed the mandatory use of point-of-sale (POS) machines in place of cash payment at restaurants and other high-end services in order to improve the city’s tax administration.
The proposal, submitted to the municipal administration, also seeks to require the use of electronic receipts at certain establishments in order to ensure a more precise calculation of taxable revenue.
According to Tran Ngoc Tam, head of the city’s tax department, the proposal, if approved, will first be imposed on large-scale restaurants and restaurant franchises in the city before expanding to include small catering services.
Tam further clarified that the proposed regulation would not require all payments to be cashless, only those that exceed a certain value.
Currently, Vietnam law requires that bills over VND20 million (US$880) be paid via POS machines to ensure proper tax accounting.
The proposal will likely lead to lowering that threshold to VND5 million ($220) in order to encourage the use of cashless payment methods, he added.
Ho Chi Minh City is perfectly capable of pioneering Vietnam’s transition to a cashless economy thanks to its developed banking infrastructure and the popular use of credit cards amongst its residents, Tam reasoned.
According to statistics from the State Bank of Vietnam, the number of POS machines in Vietnam has grown over 21 percent since 2015 and is forecast to reach 270,000 by the end of 2017.
The country has already set a goal of having 300,000 POS machines in use by the end of 2020.
|An infographic illustrating the growth in POS machine use in Vietnam between 2015 and 2020. Graphic: Tuoi Tre|
The move toward cashless payment methods is also expected to help authorities minimize opportunities for corruption and bribery by improving their ability to monitor tax declarations made by businesses.
Nguyen Kim Anh, vice governor of the State Bank of Vietnam, said the use of cashless payments in Vietnam has enjoyed continuous growth over the past few years, pointing out that the proportion of cash payments has dropped from 14.02 percent in 2010 to 11.45 percent in 2017.
“The State Bank already has a plan in place to increase the popularity of cashless payment via POS machines through 2020,” Anh said.
“The goal is to install POS machines at 100 percent of supermarkets, shopping malls, and other modern facilities by the turn of the next decade.”