Oversee and manage shopping challenges via live streaming, says Minister

E-commerce in Vietnam is growing rapidly at an average annual rate of 20-25 percent, placing the country among the top five countries in the world in terms of growth rate, said Minister Nguyen Hong Dien. The scale of e-commerce reaches over $20 billion annually, accounting for 8 percent of the country’s total consumer income. However, the rapid growth of online businesses and live streaming sales has made it difficult for responsible agencies to manage the influx of counterfeit goods and intellectual property infringements on social media. As the volume of sales through live streaming has increased, the sale of counterfeit products has become a widespread problem across categories, from cosmetics to smartphones and food.

The Ministry of Industry and Trade is analyzing a number of solutions for managing, monitoring and protecting consumer rights in e-commerce activities. In particular, the ministry plans to supplement regulations regarding the verification of the identity of individual sellers and the provision of information on e-commerce websites and applications.

In 2023, more than 6,200 stands were removed and blocked by law enforcement agencies, containing 23,359 products that were counterfeit, low-quality, or infringing the intellectual property of others. The ministry’s market surveillance service inspected 834 cases, reviewed 764 cases and imposed fines of VND 12 billion.

Responding to MPs’ questions, Minister Nguyen Hong Dien said e-commerce faces three challenges, including insecure consumer personal data, the spread of counterfeit and low-quality goods, and a significant loss of tax revenue.

In particular, the Minister found that personal data had been leaked and misappropriated while participating in e-commerce activities.

Although leakage and misappropriation of personal data are not common, the Ministry of Industry and Trade has clearly identified this problem recently. The ministry recommended that the government submit to the National Assembly the Consumer Protection Bill 2023, which complements the responsibilities of organizations and individuals to protect consumer information, such as developing information protection policies and ensuring consumer security. The Minister hopes that the Consumer Protection Act, which will enter into force on July 1, 2024, will contribute to solving the above problem.

To better manage e-commerce activities, the Ministry of Industry and Trade and the Ministry of Public Security have developed the Personal Data Protection Act. This law will cover the e-commerce sector and impose data security regulations for businesses and individuals. Therefore, e-commerce platforms will be obliged to publicly disclose their personal data protection policies: this will increase transparency and accountability in the processing of consumer data.

According to the Minister of Industry and Trade, e-commerce transactions generated a significant value of almost USD 21 billion in 2023, and tax revenues from this sector increased by over 16%. compared to 2022. However, the Minister also admitted that avoidance still exists in this area. The Ministry of Industry and Trade actively cooperates with tax authorities and the Ministry of Finance, providing data from over 900 websites and nearly 300 e-commerce marketplaces to improve tax management in e-commerce.

The Ministry of Industry and Trade continues to implement solutions to combat tax evasion by combining data to ensure transparency in tax collection and working with the Ministry of Public Security to identify sellers for proper tax collection.

In addition, the Ministry will recommend to the government to exempt low-value goods from VAT to prevent them from being imported via e-commerce and competing with domestic goods without taxation. Under current regulations, imported goods worth less than VND 1 million are not subject to VAT, while according to the study, the four major e-commerce platforms operating in Vietnam import low-value goods worth about USD 1 billion every year. If taxes are not corrected, the country will experience some loss of revenue due to tax avoidance.

The minister admitted that managing live sales pages is very difficult and is not solely the responsibility of the Ministry of Industry and Trade. It is necessary to coordinate with the Ministry of Finance (in terms of tax collection), market management services (detection of violations for timely service. This activity is unpredictable, so legal regulations should be further adjusted, which is also a global trend. E-commerce is very strong , amounting to USD 20-21 billion, so a framework is needed to manage it.

Moreover, ministries, sectors, localities and residents must join forces to prevent violations of the law in this area.

According to Finance Minister Ho Duc Phoc, in response to the government’s request, the Ministry of Finance has adopted more stringent measures to collect taxes from e-commerce platforms.

To achieve this, the Ministry has launched an electronic portal on cross-border platforms to help organizations and individuals pay taxes. As a result, VND 83,000 billion was collected in 2022, VND 97,000 billion was collected in 2023, and VND 50,000 billion was collected in the first 5 months of this year. Currently, 96 foreign suppliers, such as Facebook, Google and Tiktok, have registered and paid taxes on the electronic e-commerce portal of the Ministry of Finance. These large corporations paid VND 15,600 billion in e-commerce taxes.

The Ministry of Finance cooperated with the Ministry of Industry and Trade, the Ministry of Information and Communication, the State Bank of Vietnam and the Ministry of Public Security in tax collection. Therefore, the number of connections to the population database has reached 71.37%, with the number of connections to the database of the Ministry of Public Security being 663,157; managed and provided 929 e-commerce floors to the Ministry of Industry and Trade; we checked and compared 361 e-commerce floors in terms of connections and management. The State Bank provided 144 million accounts, of which approximately 10 million are organizational accounts and the remaining 134 million are individual accounts in 96 banks.

Minister Ho Duc Phoc said that in the future, the Ministry of Finance will intensify the implementation of the synchronous approach to tax collection on e-commerce platforms, focusing on tax collection in Hanoi and Ho Chi Minh City. The ministry also instructs tax authorities to support the implementation of tax collection on e-commerce marketplaces to ensure honesty in fulfilling obligations to the state.

Regarding imports and exports, the Ministry of Finance has directed customs authorities to implement “Smart Customs” and become a member of the World Customs Organization. The Ministry of Finance has also implemented full electronic payment and electronic tax filing to combat smuggling and professional customs clearance. In the coming period, the Ministry will continue to promote the use of information technology in customs activities to facilitate business registration.

Staff authors – Translated by Anh Quan