Tax collections from online content creators remain challenging

An increasing number of Vietnamese YouTubers, such as the short-lived ‘idol’ Ngo Ba Kha alias Kha Banh, earn large amounts of money from the social network but some YouTubers might be trying to evade their personal income tax.

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A person watches videos on YouTube. A rising number of Vietnamese people have earned money from YouTube and other social networking sites but many of them have not declared their income tax 

A draft proposal of the revised Law on Tax Management, which was made available in 2018, requires the State Bank of Vietnam and the Ministry of Finance to work together to manage taxes.

The central bank needs to set up a mechanism to manage and oversee online payment transactions. The move is meant to assist State management in reporting cross-border services in the e-commerce sector.

Meanwhile, commercial banks are asked to provide account details of taxpayers to tax authorities within 10 working days upon receiving the taxman’s request on a regular basis. Such details include their personal information, transactions and account balances.

However, the controversial regulation was excluded from the latest version of the draft tax law, released in January this year.

Lawyer Nguyen Duy Hung, a founder of IPIC Law, told Thanh Nien newspaper that this regulation potentially runs counter to the right to privacy protected by the Civil Code. In case certain individuals are found to have breached a law, providing banking account details to the taxman must be in line with prevailing regulations.

In the case of Kha Banh, who was taken into police custody on Monday and formally charged on Wednesday with gambling and running a gambling ring, he reportedly told local investigators in the northern province of Bac Ninh that he has made videos specially designed for being posted on his YouTube channel since 2017.

He claimed to have been paid some US$7,000-8,000 per month by YouTube during this initial period. Sometime later, he was receiving up to US$20,000 per month.

He portrayed himself as a tattooed young man performing a variety of anti-social acts. His videos were included underworld scenes, such as the abuse of alcohol and drugs, foul language, fighting, lavish spending, and sex acts, promoting a lifestyle contrary to the established values of society.

Viewers could see the man and his friends stop their cars in the middle of an expressway, an act that cost him a fine of VND5.5 million and a revocation of his driver’s license earlier this year, as well as Kha Banh and his friends setting a scooter worth VND70 million on fire late last month.

Such acts, however, helped enlarge his fan base on the Internet, luring large numbers of youngsters who see him as an idol or a hero.

Before his YouTube channel was deleted on April 3, his stardom had generated large advertising revenues for him from YouTube. Statistics from SocialBlade showed that his channel had more than two million subscribers, 400 published videos and nearly 400 million views.

It was categorized in the A-minus list, so the website predicted that the amount of money the social networking site had paid to Kha Banh was enormous, ranging from US$15,300 to 244,700 per month. Should the channel be able to maintain such high viewing, he could earn some US$183,500 to US$2.9 million on an annual basis.

Kha is not the only individual who can earn very large sums of money on YouTube. As of April 5, having searched for “Top 250 YouTubers in Vietnam” on SocialBlade, aside from music bands and firms, many individuals had thousands of subscribers and high-video views.

Making money with YouTube has attracted many Vietnamese to join. Data from SocialBlade showed that as of late 2018, Vietnam had more than 70 channels with over one million subscribers having Gold Play Buttons and hundreds of Silver Play Buttons for channels with 100,000 subscribers. The majority of those channels are comedies for youths, official channels of entertainment companies, and Vloggers.

However, as of April 5, there had been 178 channels with over one million subscribers. This revealed that the number has rocketed since the first quarter of this year. Also, the quantity of videos published by Vietnamese YouTuber has increased 3.4 times compared to last year.

With a modest spending of US$0.3-0.5 for video owners having some 1,000 advert views, YouTube is thought to be a “gold mine” for some Vietnamese people.

The taxman nearly failed to collect taxes from these individuals, given the lack of sufficient information. As a result, they have so far only collected from some, but not all people.

For example, last year the HCMC Tax Department requested a local 21-year-old game developer to pay a whopping VND4.1 billion in tax, as the individual had reportedly received a total of VND41 billion from Google, YouTube and Facebook in 2016 and 2017, without making declarations.

YouTube and Facebook had run in-app ads on his game platform, paying him hefty advertising fees.


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