According to Nikkei Asia, Vietnam will launch two new regulations to force global technology companies, including Alibaba (NYSE: BABA; HKEX: 09988) and Google (Nasdaq: GOOGL) to pay more taxes and hand over more data to local governments.
The news site stated that the regulations are aimed at strengthening the Vietnamese government's supervision of related fields. One proposal will allow Vietnamese regulators to access the internal data of merchants on the e-commerce website, while another proposal will introduce a tax collection system.
These global companies’ e-commerce platforms will be forced to create search functions so that the Vietnamese government can obtain data records about third-party merchants. The regulators can search these records when investigating online merchants for suspected sales of counterfeit goods or other violations.
However, the move is far fromm uncontroversial.
The tax collection system, according to the proposal, requires the Vietnamese banks to review customer accounts and deduct tax on any payments made to foreign companies for e-commerce and digital services.
Jeff Paine, the managing director of the Asia Internet Coalition, whose members include Airbnb, Yahoo and Line, the Japanese chat app operator, stated, "Certain provisions in the draft circular are concerning and overly complex, which will likely result in onerous and unnecessary burdens throughout the value chain, including on Vietnamese customers."
While businesses may be cautious, both regulations have supporters.
Long Pham, manager at Access Ventures, which invests in tech companies, said there is a "serious counterfeiting problem" with online stores, so it is fair for Vietnam to introduce solutions to solve this problem; he said that it is fair to levy taxes on companies that profit from Vietnam’s market of nearly 100 million people.
"These new reinforcements of anti-counterfeiting [rules] would actually help local brands, just as the new tax laws are helping local companies to win over local consumer markets by leveling the playing field," Long told Nikkei Asia.