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Agoda.com accused of tax evasion

Released at: 08:20, 09/12/2016

Agoda.com accused of tax evasion

Photos: Screenshots/VET

A Vietnamese online hotel booking website has charged a Singapore-headquartered competitor of tax evasion in Vietnam.

by Ngoc Lan

The local-based Vntrip.vn said on December 6 that it found shortcomings and lack of transparency in competition between domestic and foreign enterprises, especially in online hotel booking.

During the talk with VET, Mr. Le Dac Lam, CEO of Vntrip.com said Agoda.com has evaded tax duty in Vietnam. “We want to raise the issue to authorities so that tax evasion cases like Agoda.com are stopped,” Mr. Lam said.

When Vietnamese customers pay $100 for Agoda.com, the company will hold $20 for fee and pay $80 for Vietnam hotels, according to Mr. Lam. Therefore, that $20 lies outside Vietnam and the economy does not benefit from any tax at all.

Vietnam’s tourism revenue is expected to reach $30 billion by 2020, according to Vietnam National Administration of Tourism (VNAT). Of this figure, over 50 per cent is estimated to come from local travelers, who are forecasted to contribute some $5.25 billion from online room bookings. 

Online booking agents therefore, will subsequently benefit from revenue of $1.25 billion by that time thanks to the rising commission rate of 20 per cent. Vietnam, as a result, might lose some VND5-10 trillion ($220 - $450 million) from tax if there are no regulations in such cases as Agoda.com.

“Agoda has not responded to this charge from us,” Mr. Lam added. “However, the General Department of Taxation will work with Agoda.com in the future.”

Although Vntrip.com has accused Agoda.com of tax evasion, it still cooperates with Booking.com - a sister of Agoda.com, according to Mr. Lam. Agoda.com however, has not yet responded to Vntrip.com's claims.

The 2014-established Vntrip.vn is a new online travel booking service provider in Vietnam. It completed Series A fund raising of $3 million in early July this year from foreign investors including FengHe Group and Hancock Revocable Trust and has been valued at VND300 billion ($13.6 million) by investors.

The online hotel booking company launched services in July after a six month trial period. Services on Vntrip.vn can be paid for via credit card, internet banking, or cash payment at a hotel. It is also suitable for mobile apps through the Android and iOS platforms.

The total value of Vietnam’s online travel booking services industry has been estimated at some $154 million in 2015, accounting for only 8 per cent of the total tourism sector’s revenue.

Agoda.com is one of the world's largest online hotel booking service providers. Established in 2005 as a start-up, Agoda expanded quickly in Asia and was soon acquired in 2007 by the Priceline Group. It offers hundreds of thousands of accommodation options around the globe with service and support in over 40 languages. 

Operations have been set up in Singapore, Bangkok, Kuala Lumpur, Tokyo, Sydney, Hong Kong, and Budapest, and an additional presence can be found in major cities across Africa, the Middle East, Europe, and the Americas. Agoda.com offered the online rates at 6,756 hotels in Vietnam.

The target of the VNAT for Vietnam to welcome 8.5 million international tourists this year is well within reach as in the first eleven months of this year the nation welcomed over 9 million international tourists, a 25.4 per cent increase year-on-year, according to the General Statistics Office (GSO).

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