Non-cash transactions via banking mobile app. — Photo nld.com.vn

Businesses would be required to use non-cash payments for trading transactions of any value under a proposal submitted to the Government by the HCM City Tax Department.

Currently, trading transactions worth more than VND20 million (US$868) have to be made by cashless payment in order to enjoy tax refunds and corporate income tax reductions as regulated by the law on value-added tax.

The proposal is aimed at improving tax governance and strengthening monitoring of expenditures and turnover of businesses and traders, according to an official at the tax department.

The official said that payments using non-cash methods have become increasingly popular in Viet Nam, and the Government last year issued a resolution to boost cashless payments in the country.

The department also proposed that the Government create regulations for e-commerce or digital-based business activities conducted by foreign companies like Google, Facebook, YouTube, Agoda, Booking.com and Airbnb so that they will have to pay taxes in Viet Nam.

These companies would be required to provide tax agencies information on individuals and businesses in Viet Nam involved in their business activities.

The department also proposed that the Government set regulations concerning investigation of tax fraud and related crimes.

Associate professor Dinh Trong Thinh of the Academy of Finance said it was vital to speed up cashless payments to reduce the risks involved in cash payments and to increase financial transparency.

However, limited payment infrastructure was one of the barriers hindering electronic payment adoption, he said.

Regulations on non-cash payments for all transactions should not be required, he said. There should be a detailed roadmap to implement regulations on non-cash transactions to make it feasible, especially for small enterprises, he added. —VNS