Applying value-added tax on small-value imported goods is expected to create a more equal business environment for domestic enterprises.

The draft revised Law on Value Added Tax is being discussed by the National Assembly at its 8th session. The draft includes content related to the proposal to tax small imported goods with a value of less than 1 million VND. This policy is proposed in the context of small-value goods being imported through e-commerce platforms increasingly, causing tax losses and creating an unhealthy competitive environment with domestically produced products.

Trading in electronic and technology products on e-commerce, currently Mr. Le Hai Vu’s enterprise (Founder and owner of Velaboost) is performing the task of paying corporate tax, value added tax and corporate income tax.

According to him, the fact that imported goods with a value of less than 1 million VND are exempt from tax is creating great pressure on prices for businesses, while also creating an unhealthy competitive environment.

According to the Vietnam Tax Consulting Association, the tax exemption for imported goods with a value of less than 1 million VND is no longer appropriate due to the rapid development of e-commerce. Not to mention, there is also a situation of “breaking up” the value of orders to avoid taxes.

“At this stage, it is no longer appropriate. Taking advantage of this loophole, e-commerce platforms, through the issue of receiving goods via express delivery, split the value into smaller amounts to less than 1 million, which is a form of tax avoidance,” said Ms. Nguyen Thi Cuc – Chairwoman of the Vietnam Tax Consulting Association.

Recently, discussing at the Hall about the revised Law on Value Added Tax, many delegates also expressed their agreement with this policy and suggested that the drafting agencies should clearly stipulate it in the draft law.

Mr. Hoang Minh – Deputy Director of the Department of E-commerce and Digital Economy, Ministry of Industry and Trade informed: “We have also proactively developed a report to submit to the Prime Minister in issuing a telegram to strengthen state management of e-commerce, including strengthening state management of cross-border e-commerce as well as proposing amendments to Decision 78/2010 of the Prime Minister”.

According to e-commerce reports, Vietnamese people spend an average of more than $1 billion online each month. Applying value-added tax on small-value imported goods is expected to create a more equal business environment for domestic enterprises, creating a fair playing field, thereby promoting the development of domestic manufacturing.