Vietnam's E-commerce Revenue Can No Longer "Hide" from New Tax Oversight

Vietnam’s e-commerce market surged to $25 billion in 2024, up from $20.5 billion in 2023 and $16.4 billion in 2022. Despite this rapid expansion, tax collection lags behind, covering only 17.4% of total market revenue, down from 20.1% in 2022. This highlights a growing gap in state revenue and the urgent need for stronger tax enforcement to ensure fair contributions from all businesses.

Tax Revenue Gaps and Stricter Oversight‍

In 2024, 500,000 businesses and individuals operated on over 400 e-commerce platforms, generating VND 116 trillion in taxable revenue. However, tax contributions from individual sellers remained low at VND 2.5 trillion, exposing major inefficiencies in tax collection.

Meanwhile, cross-border e-commerce continues to rise, with 324.1 million imported products generating VND 14.2 trillion, marking a 38% rise in volume and 43% increase in value. Many foreign sellers remain outside Vietnam’s tax system, raising concerns about fair taxation.

New Regulations: Logistics Companies to Provide Transaction Data‍

To enhance tax collection, the Ministry of Finance has proposed that logistics companies disclose customer transaction data. Under the draft decree on e-commerce tax management, set to take effect on April 1, 2025, shipping firms will be required to report details on shipment volumes, order values, and sender information to tax authorities.

This measure is crucial, as most e-commerce transactions in Vietnam rely on logistics providers such as Shopee, Lazada, TikTok Shop, Facebook, and Airbnb. By cross-referencing logistics data with declared tax information, authorities aim to improve tax compliance within the digital economy.

Beyond tax enforcement, logistics companies also play a critical role in tracking e-commerce trade flows. With vast transaction data generated daily, they can supply detailed insights to help tax authorities verify businesses' actual revenues and ensure greater transparency.

Businesses Must Proactively Adapt‍

As tax regulations on e-commerce become clearer and stricter, a more transparent and fair business environment is emerging. Now is the time for businesses to adjust their financial systems, ensure transparent tax reporting, and fully comply with new regulations. Proactive adaptation will not only prevent unnecessary risks but also enhance brand credibility, providing a solid foundation for sustainable growth in an increasingly competitive market.

The "loophole period" in e-commerce taxation is coming to an end. Tax authorities are gaining better visibility into actual business revenues through enhanced oversight via logistics and e-commerce platforms. This means all businesses must promptly realign their operations to adapt to these inevitable changes.

Vietnam is on its way to becoming a transparent, sustainable, and highly competitive e-commerce market. In this evolving landscape, businesses that swiftly adapt, maintain financial transparency, and adhere to tax regulations will be the ones to survive and thrive in the long run.