Collecting VAT on imported goods under 1 million VND via e-commerce platforms is something that must be done immediately.

According to the General Department of Post and Telecommunications, in 2023, an estimated 45 – 63 million USD worth of small-value goods imported into Vietnam will not be subject to import tax and value-added tax every day. This invisibly creates no small amount of competitive pressure for Vietnamese manufacturing and trading enterprises in their own home market.

Every month, this unit has about 30,000 – 40,000 orders on e-commerce platforms . For each order, the unit declares and pays VAT in full, no matter how small the value. Recently, when hearing the news that import tax on goods valued under 1 million VND through e-commerce platforms will be collected, instead of being exempted as before, the unit said that this will be a factor for Vietnamese goods and cheap imported goods to compete more fairly.

Mr. Tran Lam – Director of Natural House Company Limited said: “VAT will determine how much our output is. And from that output, we start paying income tax as well as many other fees. I think applying VAT to international businesses is very necessary, whether the order is small or large, because it creates a fair game.”

Previously, Vietnam did not collect VAT on imported goods valued at less than 1 million VND, in accordance with its international commitment to the Kyoto Convention and specified in Decision 78 in 2010. However, in reality, many other countries have abandoned this Convention, in the face of the explosive growth of e-commerce. Therefore, collecting VAT on imported goods valued at less than 1 million VND via e-commerce platforms is something that must be done immediately.

Lawyer Ha Hai – Vice Chairman of the Ho Chi Minh City Bar Association commented: “Cross-border e-commerce production and business activities must pay taxes, whether 1 million, 3 million or 5 million. Companies and enterprises that conduct cross-border e-commerce business activities without declaring according to the procedures and regulations of Vietnamese law are clearly violating the law and must be dealt with.”

Dr. Ngo Minh Hai – Vice Principal of Ho Chi Minh City University of Economics and Finance commented: “Transactions under 1 million must account for 80 – 90% of all transactions through the floors. Thus, our lack of tax incentives will return to the true nature of doing business, we must pay taxes. And this is a huge source of revenue for the management agency and the Vietnamese tax system.”

Many countries in the world have abolished the tax exemption for small-value goods imported through e-commerce platforms. In our country, the Government recently announced that it will also abolish Decision 78 of 2010 and include in the draft Law on Value Added Tax (amended) that small goods must pay tax. This is to prevent the situation of “splitting” orders under 1 million VND to avoid taxes, causing budget losses and unfair competition.