Ministry proposes special tax on online games

Monday, Oct 06, 2014 17:19

Kids play online games at a store. Recently, the Ministry of Finance proposed to apply a special 10 per cent consumption tax on online games when statistics of tax departments show its high revenues. — Photo

HA NOI (Biz Hub) — The Ministry of Finance recently submitted a proposal to the Prime Minister about applying a special 10 per cent consumption tax on online games.

The online educational games approved by the Ministry of Education and Training are proposed to be exempt from the tax.

The special tax is expected to help orient the business and production operations of firms and enhance the management of online games. The ministry has suggested a 10 per cent tax to initially help enterprises to manage and take initiatives in outlining plans for investment, production and business.

It is projected that the special tax will bring in more than VND650 billion (US$30.9 million) per year.

According to the ministry, the preliminary statistics of the tax department show that enterprises providing online games earn high revenues. In 2013, approximately 58 firms, mainly in Ha Noi and HCM City, earned a total revenue of about VND7,983 billion (more than $380 million), with their domestic revenue amounting to VND6,487 billion ($308.9 million). The firms have a total charter capital of about VND1,156 billion (more than $55 million).

At the moment, most of the firms in this industry in Viet Nam are online games publishers, not online games producers. The Ministry of Information and Communications has granted licences to enterprises to market 73 online games imported from countries such as China, South Korea and Japan.

However, there are also unlicensed online games in Viet Nam, and the imported ones have earned billions of dong from Vietnamese gamers.

According to the ministry, it is difficult to define whether the online games have violent content or promote social evils, and that it is not possible to categorise the games for tax collection purposes. The ministry agrees that there is a large variety of online games for education purposes such as for teaching characters and numbers to kids and that these games should not be taxed. — VNS

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