E-commerce sellers will have to publicly announce transaction conditions and prices, among other things, photo Le Toan

In the draft Law on E-commerce released in February, the Ministry of Industry and Trade (MoIT) highlighted the responsibilities of sellers on e-commerce platforms related to tax payment as well as tracing the origin of products.

The draft proposes that sellers must carry out e-identification and authentication, including name, address, identification number, and personal income tax code before doing business on online platforms.

In addition, sellers must publicly announce general transaction conditions, prices, transportation and delivery, payment methods; information on goods and services, regulations on protecting personal information, and consumer rights.

Vu Hoang Lien, chairman of the Vietnam Internet Association, said that e-commerce platforms were good locations for fake, counterfeit, and poor-quality goods to thrive. Every year, the authorities detect and handle thousands of violations on e-commerce platforms, and in cyberspace. Controlling sellers on e-commerce platforms is still a challenge for state management agencies.

“There are many reasons for this trouble, including the lack of identification and e-authentication of sellers. The negative effects of online shopping are increasingly complicated, affecting security, order and social safety,” Lien said.

He said that account identification for sellers was necessary to build a transparent e-commerce environment and strengthen trust between sellers and buyers. This is the driving force for the development of e-commerce, and creating a digitally civilised environment.

“This may encounter some difficulties, but it is completely feasible. If we succeed, we will have both administrative and technological solutions. However, the most important is still the responsibility of both sellers and buyers to create trust in online trading because that is the core factor encouraging the development of e-commerce,” Lien said.

Phan Minh Nhut, chairman of the Vietnam Anti-Counterfeiting and Intellectual Property Protection Association of Foreign-Invested Enterprises, said that it was now too easy for sellers to launch an online store. It is a loophole for bad guys to take advantage of e-commerce platforms to sell fake or poor-quality goods or evade taxes.

“Management authorities, especially tax agencies, cannot fully monitor transactions and activities of sellers, while consumers cannot verify the reliability of online sellers. This directly affects the rights of consumers and reduces the reliability of e-commerce platforms,” said Nhut.

He said that some countries had successfully applied seller identification through e-commerce. In Vietnam, it could be verified by the VneID application. “If e-commerce accounts can be identified, sellers will carefully consider and choose goods to list on e-commerce platforms, and authorities can easily collect taxes from sellers,” he added.

According to the Ministry of Finance, there were about 300,000 individuals selling goods on more than 400 platforms, and the tax amount this group paid was about $100 million last year.

In addition to this, many business booths on commercial platforms have not yet identified sellers. On the five major e-commerce platforms Shopee, Lazada, Tiki, Sendo, and Grab, more than 300,000 booths cannot be identified. The estimated revenue of this group is about $2.8 billion.

The ministry estimates that with the tax rate that online business households and individuals pay at 1.5 per cent on a total revenue of about $2.8 billion, the estimated tax revenue is about $40 million. However, the tax collected accounts for only about 20 per cent of the revenue of this market, many businesses have not declared and paid taxes following regulations.

Last November, the prime minister issued a telegram asking the Ministry of Public Security to preside over and coordinate with relevant ministries and agencies to support e-authentication for e-commerce platforms. This aims to ensure that all organisations, businesses, and individuals are authenticated while doing business on e-commerce platforms, avoiding tax losses and other fraudulent acts.

In fact, some e-commerce platforms in Vietnam have authenticated seller accounts with citizen IDs, instead of email or social network accounts as before. Some large e-commerce platforms even require sellers to have a chip-embedded ID, business licence, and tax code. However, the number of such cases is few.

Nguyen Binh Minh from the Vietnam E-commerce Association said that in the past, thanks to easy registration of sellers on e-commerce platforms, users with fake information often opened many booths to avoid taxes or offer fake or poor-quality items.

“In addition to tax loss, unless online sellers are not identified soon, consumers will be suspicious to buy on these platforms, leading to a decrease in e-commerce growth,” he said.

According to the MoIT, Vietnam’s e-commerce has recorded strong growth. Specifically, Vietnam’s e-commerce sales reached $25 billion last year, from only $2.97 billion in 2014, equivalent to an annual average increase of 26.7 per cent, accounting for about 9 per cent of total retail sales of goods and consumer service revenue nationwide.

The proportion of the population participating in e-commerce reached over 60 per cent, with an average shopping value of about $400 per person per year.