The Vietnam Chamber of Commerce and Industry (VCCI) submitted these proposals in its comments on the draft Decree guiding the Law on Tax Administration.

VCCI specifically proposed adding regulations to allow businesses that sign scrap collection contracts to declare and pay taxes on behalf of individual scrap and junk collectors.

The recycling industry is a crucial link in the development of the circular economy, aligning with sustainable development strategies. Within this chain, scrap and junk collectors play a vital role in providing raw materials, handling initial collection and sorting.

However, VCCI noted that most collectors are small-scale individuals with limited legal understanding, facing difficulties with tax payments and invoicing. Consequently, many fear legal risks and prefer selling to informal craft villages instead of formal recycling businesses.

This situation makes it challenging for businesses in the recycling sector to access domestic scrap sources, even as the market increasingly demands higher recycling rates. In the long run, this could lead to a risk of losing orders and a decline in the recycling industry's competitiveness. Conversely, the State also faces difficulties in tax management and optimizing the use of recyclable resources.

An individual sorting scrap bottles. Photo: Thanh Nguyen

Beyond the scrap sector, VCCI also commented on the requirement for organizations cooperating with individuals in business to declare value added tax (VAT) on total revenue, regardless of how revenue is shared between parties.

According to VCCI, this regulation does not accurately reflect the economic nature of business cooperation models, especially in the context of ride-hailing services.

Currently, ride-hailing platforms typically collaborate with drivers based on a revenue-sharing model, for example, the company receives 20% and the driver 80%. However, under the draft, businesses might be liable for 10% VAT on the entire trip revenue.

VCCI believes this creates a disadvantage because businesses only receive a portion of the revenue but must declare tax on the full transaction value. Meanwhile, the revenue share allocated to drivers lacks appropriate input invoices for tax deduction.

Regarding ride-hailing drivers, VCCI considers the application of 10% VAT on drivers' revenue share unsuitable. These are primarily small-scale individual businesses, many of whom are exempt from tax or pay tax as a percentage of revenue. Under current regulations, the VAT rate for individual transport businesses is typically around 3%.

Therefore, the organization proposes amending the regulations so that platform businesses only declare and pay VAT on behalf of individuals for the shared revenue portion, and declare and pay personal income tax on behalf of drivers.

Phuong Dung