Uber Vietnam has once again gotten into trouble with local authorities for – wait for it – dodging taxes.
The ride-hailing app’s journey in Vietnam has definitely not been a picnic. Just last September, Uber was singled out by the Ministry of Transport for tax avoidance while reportedly earning VND1 billion (US$44,142) in daily profits. The company eventually forked over VND241 million (US$10,638) in taxes a week after being called out. Not a month later, during Saigon’s worst bout of rain in years, the company launched a social media campaign based on the hashtag #SaigonThatThu. The Facebook campaign was censured by the Ministry of Culture, Sports and Tourism, which accused Uber of using “inappropriate language”.
Recently, Uber headquarters authorized its Vietnamese branch to pay VND13.3 billion (US$593,750) in taxes to the government, but local officials are taking issue with the amount, reports Tuoi Tre.
According to Uber’s company policies, drivers take 80% of ride fares while the firm keeps 20%. Vietnam’s tax scheme requires the company to pay 3% of its share in value-added tax and another 2% in corporate income tax. These amounts are accounted for in Uber’s payment.
However, the government’s beef with Uber now focuses on the driver portion of the income, as drivers are also required to pay 3% in value-added tax and another 1.5% in personal income tax. Uber is expected make the deduction prior to paying its employees but has repeatedly refused to comply.
The situation is beyond complicated due to excuses from both sides. An official from the HCMC tax department was quoted as saying that Uber declined to pay on behalf of its drivers, citing a “loss of contact with those who quit driving”.
Uber, on the other hand, questioned authorities on its tax policies, as citizens currently have to pay tax only if their income exceeds a certain threshold. Due to the inconsistent nature of Uber drivers’ work, this poses another challenge in calculating the correct amount of tax to pay.
