Both Uber and Grab Taxi have reported losses, with Grab Taxi incurring VND938bn (USD41.3m) in losses due to too much promotion, discount programmes and subsidies to drivers.

At a press conference on October 27, Dang Duy Khanh, deputy inspector of the General Department of Taxation, said Grab Taxi has earned VND1.7trn (USD74.8m) from 2014 to 2016 and paid VND9.5bn in taxes. After the inspection, HCM City Department of Taxation has collected nearly VND2.3bn in tax arrears.

Grab has VND20bn (USD880,000) in chartered capital but in the report, Grab announced that it had incurred VND938bn in losses due to too much promotion, discount programmes and subsidies to drivers.

Since entering Vietnam in 2014, Uber has earned a total VND2.7trn (USD118m) and paid VND77bn in taxes. However, the authorities still had to collect VND67bn in tax arrears.

"Uber misunderstood Document 1882 issued in 2016 about corporate income tax," Khanh said.

Uber only paid the taxes after the document was issued, however, Khanh said the taxes for the past three years must be collected.

Many traditional taxi firms have complained about unfair treatment in relation to tax policies in their competition with app-based taxi services.

According to the General Department of Taxation, the operation and legal status of Uber and Grab Taxi are different from each other. Grab Taxi is considered a local business. Uber is a foreign firm that has not had any official branch in Vietnam so it has to pay outstanding tax.

dtinews