Trading on social networks, like Facebook, Instagram, and Zalo, has been booming in Vietnam for about 7 years. Many products are available: garments and textiles, footwear, food, cosmetics, pharmaceutical products, household utensils, furniture, electronics, even real estate.

Revenue from this trade channel total tens of millions of USD annually. Many of the accounts have registered with nicknames which makes it difficult to trace their origins.

Nguyen Thi Cuc, Chairwoman of the Vietnam Tax Consultation Association, says: “Individuals should honor their tax duty. The value-added tax is 1% and personal income tax is 0.5% for trading on social networks. The best way is to voluntarily register and pay tax.”

Nguyen Huu Tuan, Head of the E-commerce Management Office of the E-commerce and Information Technology Department, says individuals or organizations involved in e-commerce and earning more than 100 million VND per year have to register and pay tax. Tuan said it’s difficult to monitor personal income on social networks. The tax agency will filter accounts involved in e-commerce and identify those who have not registered for tax declaration.

Nguyen Huu Tuan said: “First we will encourage them to register for tax declaration and offer them incentives. Encouraging non-cash transactions will minimize direct payment between Facebook traders and buyers, so we can better manage transactions and tax payment.”

Hanoi and Ho Chi Minh City have the most traders on social networks. But tax collection for the state budget has lagged. The General Department of Taxation has revised regulations and upgraded applications traders on social network can use to declare tax online and promote e-commerce.