Vietnam’s e-commerce sector is experiencing unprecedented growth, with transactions worth trillions of Vietnamese dong coursing through digital platforms. This boom, driven by nearly 725,000 businesses and individuals, has not only reshaped the country’s economy but also prompted sweeping changes in tax policy. The Ministry of Finance (MoF) recently revealed that tax authorities, in collaboration with the Ministry of Industry and Trade, have tracked 40 billion transactions valued at VNĐ366 trillion (approximately US$14.3 billion) between late 2022 and 2024. As the government moves to harness this digital windfall, proposed reforms to tax laws and e-commerce regulations signal a new era of oversight and accountability for online businesses.
In 2024 alone, tax authorities tackled over 33,000 violations involving e-commerce businesses, recovering nearly VNĐ1.4 trillion ($55 million) in taxes and fines. This crackdown, alongside plans to amend the Tax Administration Law and E-commerce Law, underscores Hanoi’s determination to bring order to a rapidly evolving sector. With transaction values soaring and digital platforms becoming integral to Vietnam’s economy, the stakes are higher than ever. How will these reforms balance growth with regulation, and what do they mean for the future of digital trade in Vietnam?
A Digital Economy on the Rise
Vietnam’s e-commerce landscape has exploded in recent years, fuelled by widespread internet access, a young, tech-savvy population, and the proliferation of platforms catering to everything from fashion to groceries. Data shared by the MoF highlights the scale of this transformation: 439 e-commerce platforms reported a transaction value of VNĐ75 trillion in 2024, contributing VNĐ116 trillion in tax revenue—a marked increase from the VNĐ83–97 trillion recorded annually in the prior two years. 
This growth has not gone unnoticed. The government has supported over 41,500 households and individual businesses in registering and paying taxes via the national electronic tax portal, contributing more than VNĐ258 billion to the state budget as of late February 2025. From live-stream sales to affiliate marketing, online business models are diversifying, creating opportunities for entrepreneurs across urban and rural areas alike. Yet, with opportunity comes complexity, as tax authorities grapple with how to monitor and regulate an industry that often operates beyond traditional oversight mechanisms.
Cracking Down on Violations
The rapid expansion of e-commerce has also exposed significant challenges in enforcement. In 2024, tax authorities identified violations by 736 enterprises and 32,267 individuals engaged in online business. The scale of non-compliance—ranging from underreported income to outright tax evasion—prompted a robust response, with fines and recovered taxes totalling nearly VNĐ1.4 trillion. This figure reflects not just the size of the problem but also the government’s growing capacity to track digital transactions, thanks to data-sharing agreements with 929 websites and 284 applications providing e-commerce services.
Such enforcement efforts are a double-edged sword. On one hand, they signal to businesses that the days of operating under the radar are over, ensuring a level playing field for compliant entities. On the other, they risk alienating small-scale sellers who may struggle to navigate complex tax requirements. For many individual entrepreneurs, particularly those in rural areas with limited access to digital literacy programmes, the prospect of audits and penalties could dampen the entrepreneurial spirit that has driven Vietnam’s e-commerce boom.
Proposed Reforms: A New Regulatory Framework
Recognising these challenges, the MoF is spearheading a comprehensive overhaul of tax and e-commerce regulations. Proposed amendments to the Tax Administration Law and E-commerce Law aim to address emerging business models such as live-stream sales and affiliate marketing, which have become popular but often fall outside existing tax frameworks. Additionally, the government is drafting a decree to guide the implementation of new laws affecting e-commerce platforms and digital service providers.
A key component of these reforms is a mandate for both domestic and foreign e-commerce platforms to withhold and remit taxes on behalf of sellers operating on their sites. This move, if enacted, would shift a significant administrative burden from individual sellers to platform operators, potentially streamlining compliance. However, it also raises questions about implementation—will platforms have the infrastructure to manage such responsibilities, and how will this affect their operating costs?
Furthermore, authorities plan to intensify tax audits and inspections targeting individuals and organisations engaged in e-commerce and digital business. While this could boost state revenue, it may also heighten tensions with sellers who feel overburdened by regulation. If confirmed, these measures could reshape the relationship between Vietnam’s government and its burgeoning digital economy, though their long-term impact remains speculative pending final legislation.
Balancing Growth and Oversight
Vietnam’s e-commerce sector is at a crossroads. The government’s push for stricter tax compliance reflects a broader ambition to formalise the digital economy, ensuring that it contributes fairly to national development. Tax revenue from e-commerce, which reached VNĐ116 trillion in 2024, is already a vital source of funding for public services, infrastructure, and social programmes. Yet, overzealous regulation risks stifling innovation and discouraging small businesses from participating in the digital marketplace.
Analysts suggest that a balanced approach is crucial. If reforms are tailored to support rather than penalise small-scale sellers—through simplified tax filing processes or educational outreach—they could foster trust and compliance. Conversely, if enforcement is perceived as punitive, it may drive sellers underground, undermining the very goals of regulation. While no evidence confirms the exact outcomes of these proposed changes, conditional analysis suggests that their success will hinge on effective communication and support mechanisms for businesses of all sizes.
The international dimension adds another layer of complexity. Foreign e-commerce platforms operating in Vietnam, such as global giants with significant market share, will also be subject to the new tax withholding rules under the draft decree. This could level the playing field with domestic platforms but may invite pushback from international firms wary of additional compliance costs. How Hanoi navigates these tensions will be critical to maintaining Vietnam’s attractiveness as a hub for digital investment.
Broader Implications for Vietnam’s Economy
The rise of e-commerce is emblematic of Vietnam’s broader economic transformation. As one of South East Asia’s fastest-growing economies, the country has leveraged technology to drive trade, create jobs, and connect with global markets. The VNĐ366 trillion in transactions recorded over two years is a testament to the sector’s potential to fuel GDP growth, particularly as traditional retail faces challenges from changing consumer habits.
Yet, this digital shift also exposes vulnerabilities. Cybersecurity risks, data privacy concerns, and the potential for tax evasion through cross-border transactions are issues that Hanoi must address alongside tax reform. The government’s collaboration with the Ministry of Industry and Trade to monitor e-commerce platforms is a step in the right direction, but sustained investment in digital infrastructure and regulatory capacity will be essential to keep pace with the sector’s growth.
Moreover, the e-commerce boom has social implications. It has empowered individuals and small businesses to reach wider audiences, reducing economic disparities between urban and rural areas. However, without careful policy design, new tax burdens could disproportionately affect smaller players, exacerbating inequalities. The government’s challenge lies in crafting reforms that promote fairness without undermining the inclusivity that e-commerce has fostered.
Looking Ahead: A Digital Future
As Vietnam charts the future of its e-commerce sector, the proposed reforms represent both an opportunity and a test. If implemented effectively, they could solidify the country’s position as a leader in South East Asia’s digital economy, ensuring that the benefits of growth are shared equitably through tax contributions. However, if mishandled, they risk alienating the very businesses that have driven this transformation.
For now, stakeholders await further details on the amendments to the Tax Administration Law and E-commerce Law, as well as the final text of the government’s draft decree. What is clear is that Vietnam’s digital economy is no longer a niche sector but a cornerstone of national development. How the government balances innovation with regulation will shape not just the future of e-commerce but the broader trajectory of Vietnam’s economy in the years to come.
In a country where nearly three-quarters of a million people are engaged in online business, the stakes could not be higher. As Hanoi moves to formalise this dynamic sector, the world watches to see whether Vietnam can set a model for digital governance—one that other emerging economies might follow.
