Are taxes missing out on the 'rich'?

YouTubers earn billions of dollars but pay very little in taxes.

For example, according to statistics from Social Blade as of May 30th, YouTuber Tho Nguyen's channel has 10 million subscribers. The site estimates that Tho Nguyen could earn between $20,000 and $319,000 per month, equivalent to an annual income of between $239,600 and $3.8 million. This translates to an income of over 5.5 billion to 88.5 billion VND. Under current regulations, YouTubers must pay 7% tax on their revenue (including 2% personal income tax and 5% value-added tax). Therefore, Tho Nguyen would have to pay approximately 380 million to 6 billion VND in taxes per year. However, according to information from the Binh Duong Tax Department, the account holder Thơ Nguyễn is Ms. Nguyễn Thị Hồng Thơ, residing in Binh Duong, who paid 360 million VND in taxes in 2020 and 213.5 million VND in early 2021. Thus, it can be seen that the YouTuber only declared and paid taxes based on the lowest income level, which is less than 4 billion VND per year.

YouTubers and TikTokers earn huge incomes but pay significantly less in taxes than salaried employees.

Ngoc Duong - Nhat Thinh

Let's assume an individual working for a salary has a total income of approximately 4 billion VND/year. After deducting personal allowances for the taxpayer and two dependents, the taxable income is 3.76 billion VND. At the 35% tax rate, the amount payable is over 1.3 billion VND, equivalent to a tax rate of over 32% on total income. Thus, even with the same income level, a salaried employee has to pay 3-6 times more personal income tax than YouTuber Tho Nguyen paid.

In fact, it's not just YouTuber Tho Nguyen; numerous other YouTubers and TikTokers have become famous over the years and have amassed a huge following. For example, the NTN channel, after reaching 10 million subscribers in early August 2021, became the first individual in Vietnam to receive the Diamond Play Button and now has 10.2 million followers. The owner of the channel, Nguyen Thanh Nam (from Thai Binh ), also has three other official YouTube channels: Mr Nam Vlogs, Mr Nam Gaming, and NTN Vlogs. Statistics from Social Blade show that this channel currently has an estimated average annual income of $153,000 - $1.7 million, equivalent to 3.7 - 40 billion VND. Another YouTube channel with a massive fan base is Cris Devil Gamer, with 10.6 million subscribers and also achieving the Diamond Play Button in October 2021. A previous estimate by Social Blade also indicated that the channel owner, Phan Le Vy Thanh, earns between $162,400 and $2.6 million annually, equivalent to 3.9 to 62.4 billion VND… The exact amount of tax paid by most of these YouTubers, or whether they pay at all, is not publicly disclosed.

Similarly, many individuals doing business online also have "huge" incomes, but according to regulations, they only pay 1.5% tax on their total revenue (including value-added tax and personal income tax). While there are no precise figures on this activity, according to the Ministry of Industry and Trade , in 2022 the size of the domestic retail e-commerce market was estimated at US$16.4 billion, equivalent to VND 393,000 billion, accounting for 7.5% of the country's total consumer goods and services revenue. With a growth rate of 20% per year, Vietnam is ranked among the top 5 countries with the fastest e-commerce growth in the world by eMarketer. Based on this sales volume, the estimated tax revenue from this activity would exceed VND 5,800 billion per year. However, last year, the tax authorities only collected over VND 600 billion from domestic organizations and individuals with commercial activities exceeding VND 1 billion, mainly from organizations and businesses. Therefore, the personal income tax collected from individuals doing business online is just a drop in the ocean.

Singing at weddings earns you the equivalent of a car.

Not only YouTubers, TikTokers, or individuals doing business and selling on social media platforms, but the income of singers has long been a topic of public interest. At the end of 2022, "Bolero Queen" TM announced that she earned the equivalent of a car's fee for singing at a wedding in the Mekong Delta. A company that organized a music show said that the fees for inviting singers vary considerably. In a music show two years ago, the company invited A-list singer M. to sing three songs for a fee of 500-600 million VND. For B-list singers, the fee is around tens of millions of VND per song.

Also at the end of 2022, singer SB was found to be in arrears with personal income tax payments totaling nearly 100 million VND, preventing him from performing abroad, which attracted much attention. This is just one of the cases of artists found to be in tax arrears. From 2016 to July 2019, the Ho Chi Minh City Tax Department collected over 31 billion VND in back taxes from artists. In 2019 alone, the tax authorities collected 15 billion VND in back taxes from artists. The highest amount of back taxes collected was from a director living in Ho Chi Minh City, totaling 2.4 billion VND. In 2016, the Tax Department collected back taxes from 20 artists totaling 5.3 billion VND; in 2017, from 12 artists totaling 6.6 billion VND; and in 2018, from 5 artists totaling 4.5 billion VND. In 2012, the Hanoi City Tax Department also collected 600 million VND in back taxes from six famous artists, including a director with an income of over 1 billion VND and a singer with an income of nearly 1 billion VND that year. Notably, the amount of tax paid by artists and celebrities is becoming increasingly secretive.

Seventeen years ago, a list of incomes and taxes paid by singers each year was published, attracting much attention. Among them, singer HNH paid the highest tax at 179.5 million VND, with an income of 732 million VND. Next was singer LT with an income of 693 million VND and a tax payment of 137 million VND. Third was singer D.VH with a tax payment of 132 million VND, despite having the highest income of 780 million VND… The income figures published at the time surprised many because they were significantly lower than the actual figures. However, since then, the tax authorities have almost never revealed the identities of artists who paid taxes or were subject to back taxes, even though their performance fees have increased many times.

According to a tax official, artists operate under stage names rather than official titles, often managing companies and signing contracts under those companies' names. Therefore, it's difficult to track their income or the amount of taxes they pay. Many singers, after just a few years in the industry, are rumored to own houses worth tens of billions of dong and drive cars worth billions; however, the actual amount of tax they pay to the state budget is unknown. Many artists, in addition to performing, also earn income from various sources such as advertising for brands and products, hosting programs, and modeling. But no one knows their total income, a stark contrast to salaried employees whose businesses fully declare their earnings. This is not to mention that many YouTubers, TikTokers, singers, and artists can transfer their income to their companies to deduct all operating expenses and only pay corporate income tax if they make a profit, a practice that salaried employees cannot implement.

In 2022, the Ho Chi Minh City Tax Department processed 38 cases involving income from Google, with the total amount of back taxes, fines, and late payment penalties reaching 169 billion VND. Among them, one individual with a huge income from Google who "forgot" to pay taxes was fined 31 billion VND by the District 7 - Nha Be Tax Office… However, these figures are just a drop in the ocean compared to the revenue and growth rate of e-commerce in Vietnam.

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