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| A livestream sales session via TikTok Shop__Photo: Chu Quoc Hung/VNA |
Vietnam’s livestream shopping market is experiencing a period of exponential growth with the sales revenue per livestream session repeatedly reaching new highs.
Addressing the 2024 Vietnam E-Commerce Panorama Forum, Le Minh Trang from NielsenIQ’s Retail Research Department revealed that according to the results of a recent survey, 60 million Vietnamese people usually shop through e-commerce channels. Every day, there are 3.5 million visits to e-commerce sites. Vietnam now ranks 11th globally in the number of online shoppers every week with 90 percent of consumers continuing to use e-commerce platforms for shopping.
AccessTrade Vietnam, one of the leading affiliate marketing platforms operating in the country, estimated that by the next year, Vietnam’s digital economy will reach appropriately USD 45 billion, of which e-commerce will contribute USD 24 billion. Facebook, Shopee and TikTok are the most popular livestream sales platforms in Vietnam, respectively accounting for 31.9 percent, 30.9 percent and 17.2 percent of the country’s streaming shopping market. On average, there are 2.5 million livestream sales sessions per month with the participation of more than 50,000 sellers. Particularly, there have appeared “mega” or “super” livestream sessions which can earn a revenue of millions of dollars. In May, a mega live event on TikTok by a couple hit a revenue of VND 100 billion (nearly USD 4 million) after 17 hours. In early June, the couple set the target of VND 150 billion in revenue for a livestream session and finally gained VND 80 billion after 40 hours. Livestream sales revenues could account for up to 20 percent of e-commerce revenue by early 2026, according to a forecast by consulting firm McKinsey & Company.
In a talk with the Tuoi Tre, representative of TikTok Vietnam Nguyen Lam Thanh affirmed that recent huge livestream sales sessions taking place on the platform are all implemented in accordance with law.
According to Thanh, the number of orders placed at each “mega” livestream sales session may reach tens of thousands and, obviously, all parties are aware of the tax story. “All transactions are recorded,” Thanh stressed, adding that “no one dares to carry out an activity that does not fully comply with tax obligation.”
For livestream sales sessions each recording millions of dollars in revenue, brands will, in the capacity as suppliers of goods, be held responsible for the goods they supply and must pay assorted taxes such as import duty, corporate income tax, etc. Meanwhile, salespeople, who appear in the livestream sessions and are paid remuneration at a fixed level or based on the total revenue of the livestream sessions, will pay personal income tax for the amounts they receive.
Shopee, another giant player on the livestreaming sales market, also affirmed that all activities on Shopee Live (the livestream platform on Shopee) are carried out based on Shopee Live’s community standards, Shopee’s policies and relevant regulations. Sellers will have to guarantee that their goods as well as the contents of their livestream sessions comply with current laws and the platform’s policies.
Despite these affirmations, there still exist loopholes in management of goods sold via livestream platforms. In early June, the Vietnam Directorate of Marker Surveillance under the Ministry of Industry and Trade (MOIT) discovered a warehouse containing about 2,000 suspected smuggled items, including cellphones, tablets, electronic devices, household appliances, etc., which are posted for sale on TikTok Shop.
Solutions for tightening management of livestream selling
E-invoicing
In order to prevent loss of tax revenue, particularly from livestream selling and e-commerce transactions, the Ministry of Finance (MOF) has recently been asked by the Prime Minister to review and revise Decree 123/2020/ND-CP on the use of e-invoices for these transactions so as to require livestream sellers to issue e-invoices to customers.
Most economic experts on the one hand agreed that mandatory e-invoicing is an effective tool for tightening tax administration but, on the other hand, pointed out several issues that should be taken into consideration when applying such solution simultaneously to e-commerce and livestream selling.
In a talk with the Tuoi Tre Online, Phan Phuong Nam, Deputy Dean of the Ho Chi Minh City University of Law’s Commercial Law Faculty, raised the question about the issuance of e-invoices by individual sellers.
“Do individual sellers need to carry out business registration to be able to issue e-invoices? At present, there are many people selling goods via social networking sites but they cannot develop and have to stop [their business] after a short period of time. Do these people have to register and issue e-invoices?”, Nam asked.
The law expert suggested that competent agencies should provide specific guidelines so that business individuals can self-assess and consider whether or not they are subject to mandatory e-invoicing regulations.
Meanwhile, according to e-commerce expert Tuan Ha, member of the Vietnam E-Commerce Association, in order to better manage online sellers and avoid loss of tax revenue, tax authorities should work with order-managing or transport companies to grasp information for use as grounds for tax collection. “It is very difficult to require business individuals to issue e-invoices,” Ha said, adding that there is currently no regulation on this issue.
Director of Economica Vietnam Le Duy Binh recommended revising law to clarify the legal status of business households and individuals.
“Once you do business, your tax obligations will arise. But if you want to issue invoices, you must have a ground and your legal status must have been determined. Hence, only after the legal status of business households and individuals is determined, can we have a basis for formulation of other relevant regulations, including tax-related ones,” Binh was quoted by the Tuoi Tre Online as saying.
Cashless payment
It is obvious that the more popular cashless payment is, the more effective tax administration and collection will be. When cash transactions are restricted, it will be difficult for sellers and service providers to hide revenues and evade taxes.
According to the State Bank of Vietnam (SBV), by the end of 2023, there were more than 182 million personal payment accounts in Vietnam, with 87.08 percent of adults owning at least one payment account, and more than 147 million active bank cards.
As revealed by the SBV, the bank is assigned to establish a mechanism to manage and monitor payment transactions to support tax administration. Worthy of note, up to date, credit institutions have provided the MOF with information on more than 130 million payment accounts of taxpayers.
The provision of data on taxpayers’ bank accounts to tax agencies is carried out in accordance with the Law on Tax Administration and its guiding text, Decree 126/20220/ND-CP. Banks will provide information on bank transfers, account balance, etc., at the request of heads of tax agencies. Tax agencies will use information provided by banks to check tax liabilities of those who sell goods through e-commercial platforms or social networking sites but fail to declare and pay tax.
Increase of penalties for trading in counterfeit and banned goods
In order to protect online customers, the Prime Minister has requested the MOIT to revise Decree 98/2020/ND-CP along the line of increasing penalties for administrative violations related to production of and trading in counterfeit and banned goods, especially those conducted in the cyber environment. Meanwhile, the MOF is asked to strictly handle tax- and customs-related violations in e-commerce activities.
In addition to increase of penalties, some experts even proposed stronger measures.
Nguyen Duy Vi, Director of Communication Services Company Buzi, said that if livestreaming is considered a new selling channel, there should be a separate management agency to take charge of it. Such agency will receive consumers’ feedback and reports on violations committed by livestreamers and take quick actions to handle wrongdoings with the focus on ensuring quality of products sold in livestream sessions.-
