Traditional taxis are not taxed like Grab and Uber

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the tax collection of Grab, Uber is fully compliant with the current tax law

The Ho Chi Minh City Taxi Association has sent a proposal to the Ministry of Finance for traditional taxis to apply the tax assessment as Uber and Grab or allow traditional taxis to pay the Value Added Tax at the rate of 5% instead of the current 10%.

Responding to this recommendation, the Ministry of Finance said that the current tax law is applied uniformly among types of enterprises (uniformed on tax rates, conditions on investment incentives, tax exemption and reduction). According to the Tax System Reform Strategy for the period of 2011-2020, Value Added Tax will be applied on a uniform basis of 10%, while the 5% will apply only to essential goods and the tax rate of 0% applies to exportation. Therefore, the Ministry of Finance confirmed that the recommendation of the Taxi Association of Ho Chi Minh City for traditional taxis to pay 5% VAT is unreasonable.

According to the Ministry of Finance, the statistics of the whole tax sector show that in Ho Chi Minh City, in 10 enterprises with large revenue there are 2 enterprises which generate deductable Value Added Tax, but do not generate payable Value Added Tax. Specifically, Mai Linh Travel Co., Ltd, Thanh Buoi Tourism Co., Ltd. Some other companies have the ratio of Value Added Tax on turnover below 3%. This is Gia Dinh Joint Stock Company, Saigon Tourist Transport Company, and No.10 Transportation Cooperative.

As for Corporate Income Tax, most enterprises have a low ratio of income tax over returns, or no generation of payable corporation income tax. The payout rate is about 0.01% to 0.06%. Particularly, Anh Duong Co., Ltd has the rate of corporate income tax of 1.97% of turnover (equivalent to the fixed level of Uber). This means that corporate tax rates for many taxi companies are far below the Uber tax rate. Therefore, the Ministry of Finance affirmed that the traditional taxi companies claim that they are subject to a lot of taxes, charges which are quite different from Grab and Uber which is not reasonable.

Regarding the proposal of the tax on Grab and Uber and investors cooperate with Grab and Uber must be based on 100% of revenue, the Ministry of Finance said that all revenue from transport business must declare and pay tax. For each organization or individual engaged in transport business in the form of a turnover-sharing business cooperation contract, it is obliged to pay tax on the revenue which is divided according to the cooperative agreement.

Accordingly, the Ministry of Finance affirmed that if Uber and Grab's 100% of the revenue which was generated by the customer is determined to be taxable, it will result in overlapping and unreasonable taxes. For this reason, the Ministry of Finance said that with 100% of the revenue received from customers, Uber is entitled to only 20% of transportation revenue, while the remaining 80% of transport revenue is gave to organizations and individuals who cooperated with Uber under business contract and these organizations and individuals shall declare and pay tax according to the regulations applicable to the turnover they are entitled to.

Uber Netherlands finalizes documents to declare and pay taxes to the State budget VCN- After receiving instructions from the Ministry of Finance on the declaration and tax payment for business ...

Currently, the Ministry of Finance is conducting a review of signs of tax fraud risk with taxi enterprises. On that basis, the tax office shall inspect and supervise the enterprise and handle it according to the provisions of law.