Vietnam’s battle of the taxi apps has taken another interesting turn: one of the country’s biggest players, Uber, is being called out again for allegedly evading tax payments.
Le Hoang Minh, deputy director of the Ho Chi Minh City Department of Transport, told Tuoi Tre that Uber is not complying with Vietnam’s laws during its online operations. The company has reportedly been avoiding many legal requirements for a transport company, including those regarding its business registration, taxi signs and in-vehicle journey recorders.
Even though Uber only takes 20% of the fare from each ride, they receive full payments directly from passengers before returning 80% of the revenue to their freelance drivers. Thus, Uber maintains their legal status as an application, rather than a taxi company, and doesn’t pay taxes.
The amount of tax which the Vietnamese government is losing from Uber is substantial, especially as the drivers themselves are not obliged to pay any taxes since their vehicles are privately owned. According to VietnamNet, Uber drivers can earn up to VND20 million a month (US$896). As of January this year, Uber was reportedly earning VND1 billion in profit on a daily basis, while the local government still hasn't received any tax income, reports Tuoi Tre.
Besides Vietnam, Uber’s alleged tax evasion has also been making headlines around the world. “[Uber’s worldwide] network of subsidiaries has been carefully pieced together to create a state-of-the-art structure for minimizing taxes”, reports Fortune.
The company’s dubious record on tax payment has resulted in many state agencies and city governments banning the app’s services.
Last year, Vietnam’s Ministry of Transport also announced it would launch an app for local taxis to boost their competitiveness in the face of Uber’s growing popularity.
