On December 7, hundreds of drivers of GrabBike technology vehicles simultaneously turned off the app and gathered to protest against the 10% VAT increase regulation which was effective from December 5, 2020.
A GrabBike driver, who did not want to name for safety reasons (temporarily called Mr. A), was present at an area near the Grab headquarters, in Tan Phong ward, District 7, Ho Chi Minh City on the morning of December 7 told RFA the scene he witnessed with his own eyes the police treating the GrabBike drivers:
“In the District 7 area, they did not call to disband, but they told them to park their motorbikes on the side of the road and asked the GrabBike drivers to protest peacefully, not to cause trouble. In general, after knowing the protests’ purpose, the police officers also agreed.”
Response from authorities
The RFA radio recorded the meeting at the Grab headquarters with a large number of GrabBike drivers being able to live directly on the social networking site Facebook, called “GrabBike Saigon Association,” which lasted more than 1 hour. Another GrabBike driver, who also did not want to name (temporarily called Mr. B), reported the meeting with representatives of the city’s Taxation Department and the Grab Company.
In general, people talked around and around without talking about the main issue. The representative of the Taxation Department did not answer the question that the 10% additional VAT is paid by the company or the GrabBike driver. The Taxation Department’s representative at first answered roundly. After about an hour, he said that he has not authorized to answer. Meanwhile, the representative of Grab Company, Ms. Ha, Director of the Southern Region, asked the protesters to give more time for her to answer the question properly. The driver asked the time for how long: 1 day or 1 week, 1 year or 10 years … and Mrs. Ha said she would answer as soon as possible, not give a specific time.
The state-controlled media reported that in Hanoi, hundreds of people wearing Grab shirts took to the streets to march on motorbikes through the roads of Dinh Tien Hoang, Nguyen Chi Thanh, Cau Giay … and then gathered at Grab Duy Tan headquarters. This group of people was said to carry banners, slogans asking Grab to reconsider the new tax policy.
The Lao Dong online newspaper, quoted from a Grab representative in Hanoi, said to the speaker and explained to the drivers that the 10% VAT increase is a state regulation, not by Grab’s arbitrary increase.
Zing.vn, in a news related to GrabBike drivers who protested against the 10% increase in VAT, on December 7 quoted the Deputy Head of the Hanoi Transport Police Department, Major Dao Viet Long as saying the group of drivers wearing Grab shirts marched without asking permission from the authorities and this agency reported to the Hanoi Police, in the afternoon of the same day, to propose a handling plan according to regulations.
Aspirations and hopes of GrabBike drivers
The incident of hundreds of GrabBike drivers demonstrating in Hanoi and Saigon took place after Decree 126, which was enacted and took effect on December 5, 2020. Decree 126 specifies that all technology drivers will be considered individuals cooperating with business organizations and are subject to a 10% value added tax (VAT) incurred on all vehicles, instead of 3% as at present.
A simple example that GrabBike driver Nguyen Van Dung shared with RFA on December 3 is a ride with 100,000 VND, then pay 20% for Grab Company. With the new tax rate increasing by 10% VAT, the total VAT per ride is up to 30%.
GrabBike driver temporarily called A’s name, sharing more on December 7:
“Because 20% of VAT is already included in the tax collection for the government. The question is that the 10% increase is borne by the customer or the driver or the customer and the Grab company must share. Calculating that the discount VAT is now more than 27%. This tax is too high, not to mention the cost of fuel costs, and car damage“
Through discussions with two anonymous drivers, Radio RFA raised the question whether they will continue this work, in the condition that the VAT rate is still increased by 10% that GrabBike drivers must bear. Both drivers responded to us that they had to find another job to do. The GrabBike driver temporarily called the name B and expressed:
“I have to find another job because the tax is too heavy, they just collect taxes but do not worry about the driver.”
The GrabBike driver temporarily called B’s name, adding that there is no hope after the meeting with the representative of the Taxation Department and the representative director of Grab South Region:
“There is definitely no hope. Because the angry drivers gathered to the company to ask that, but this increased tax regulation should be reported to Prime Minister Nguyen Xuan Phuc, if he resolves it, then hope it will be. As for the Taxation Department, which has issued the regulations, there is no hope they will revoke the decision. The Tax Department and the Grab Company consider it as one. What regulations does the Taxation Department issue, the Grab company must comply and the Taxation Department does not need to know how Grab Company will do, as long as it only collects 10% of the added VAT.”
The national budget suffers from huge deficits and the tax increase to cover the deficit of the national budget is, in theory, fairness. Because in the forms of the transport business, recently, the public goods industry, particularly Vietnam Airlines, has been granted trillion by the State to compensate for the loss caused by the COVID-19 pandemic. But while the economic situation is difficult, many workers who have to plunge into the street to practice motorbike taxi driving are taxed. Such taxation on the unskilled workforce, I think, is very unfair. And that taxation, in fact, would cause enormous underground social instability; not only in the transport sector but also in many other fields. Because transportation costs are also related to production costs and service prices of many other industries,” said Hanoi-based Nguyen Lan Thang
Zing.vn newspaper network, in late September 2019, recorded according to estimates of Google and Temasek, the market for technology vehicles, including food delivery services in Vietnam, had a scale of $500 million in the year 2018, 2.5 times higher than the $200 million in 2015. This figure could increase to $2 billion in 2025. In which, according to ABI Research, in the first half of 2019, Vietnam Male has 200 million trips through technology application and Grab dominates 73% market share.
Mr. Nguyen Lan Thang, a customer using GrabBike service and a social activist, closely watched the strike of GrabBike drivers on December 7, spoke to RFA about his views.
“The national budget is in huge deficits and the tax increase to compensate for the national budget deficit, in theory there must be a fairness. Because in the forms of transport business, recently, the public goods industry, particularly Vietnam Airlines, has been granted trillion by the state to compensate for the loss caused by the COVID-19 pandemic. But while the economic situation is difficult, many workers who have to plunge into the street to practice motorbike taxi driving are taxed. Such taxation on the unskilled workforce, I think, is very unfair. And that taxation, in fact, would cause enormous underground social instability; not only in the transport sector but also in many other fields. Because, transportation costs are also related to production costs and service costs of many other industries as well.”
On RFA’s Facebook page, we also acknowledge a lot of opinions with GrabBike drivers that the Vietnamese government needs to reconsider the new regulation to increase the 10% VAT on technology vehicle services. Readers Nguyen Phi Long commented that “Between the COVID-19 epidemic and storms and floods, the people were upset. Life is very difficult, but the VAT increase is inhuman and unreasonable.”
Thoibao.de (Translated)
