The National Assembly (NA) Committee on Finance and Budget has proposed considering levying Value Added Tax (VAT) on goods imported by e-commerce platforms such as Shopee, Lazada, Tiki and TikTok.
Committee chairman Le Quan Manh made the proposal when he submitted a report on the review of the draft amended VAT law in Parliament on Monday afternoon.
According to statistics from state-run Vietnam Post and Telecommunications Group, commonly known as VNPT, an average of 4 million to 5 million orders were transported from China to Vietnam per day in March 2023. The value of each order ranged from VND100,000 ($3.9) to VND300,000 ($11.7).
On average, between $45 million and $63 million worth of goods were traded on these e-commerce platforms every day.
Mann said the draft bill includes provisions that would mean gifts, personal property and import duty-exempt cross-border goods would not be subject to VAT.
In fact, the exemption from import taxes on gifts is provided for in Decree No. 134 of 2016 on Instructions on the Import and Export Tax Law.
In particular, the VAT exemption following the import tax exemption under the Law on Import and Export Taxes is still being adjusted in line with Prime Minister's Decision No. 78 of 2010.
Under the decision, imported goods worth less than VND1 million ($39) sent via express services will be exempt from import duty and value-added tax.
After examining the regulations, the Commission found that the VAT exemption for low-value imports is based on the fact that the revenue generated from the tax is insignificant compared with the administrative fees charged at customs and the costs of tax compliance.
In the past, the number of low-value orders imported into Vietnam was not high, but now, with the explosion of cross-border e-commerce, the number has doubled, he explained.
Meanwhile, many countries have abolished VAT exemption rules for low-value imports to ensure tax collection and create a fair business environment between domestic and imported products.
Therefore, the Commission suggested learning from other countries about the common trend of eliminating VAT exemptions to increase budget revenues.
The meeting also presented proposals to supplement rules allowing exemptions from value-added tax on import duty-exempt goods traded by border residents and on goods imported for donations.
According to a report by Finance Minister Ho Duc Phuc, the number of products that are exempt from VAT or subject to a 5% VAT rate under current law remains huge.
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