Car-hailing App Grab Reports Deeper Losses in Vietnam

Ngan Nguyen

14:35 01/12/2017

BizLIVE - Car-hailing app Grab has reported increasing losses year by year since entering Vietnam in 2014.

Car-hailing App Grab Reports Deeper Losses in Vietnam

Grab is offering aggressive promos in Vietnam. Photo: Internet

In the three years of operation in Vietnam, Malaysia-based car-hailing app Grab suffered a combined loss of 938.2 billion dong ($41 million), mainly due to huge promotions, marketing costs and offering lower fares compared to traditional taxi companies.
Specifically, in 2014, the company reported a loss of 51.6 billion dong ($2.28 million), while the figures for 2015 and 2016 were over 441 billion dong ($19.51 million) and 444.7 billion dong ($19.67 million), respectively.
In a response to voters’ inquiry during the third session of the Vietnamese National Assembly’s 14th tenure, the Ministry of Finance announced that Grab Ltd. Co. now has a chartered capital of 20 billion dong ($884,955), with two main stakeholders being a foreign company (49%) and individuals in Vietnam (51%).
According to the ministry, based on regulation on tax management, Grab is classified as a company with high risk of tax evasion, which should be subject to being strictly monitored.
Also, the ministry will work with the State Bank of Vietnam and relevant authorities to review Grab’s paid-up capital from overseas to promptly prevent potential tax evasion, and commercial fraud if any.
Earlier, Dang Duy Khanh, deputy inspector chief of the ministry’s General Department of Taxation, said since its appearance in Vietnam in February 2014, Grab’s total revenue in 2014-2016 was 1.755 trillion dong ($77.65 million) with over 9.5 billion dong (around $420,350) of tax filed.
According to tax authorities, Ho Chi Minh City’s department of taxation has inspected Grab Vietnam Co. in the past three years. The result shows that the company violated regulations on taxation and has been asked to pay an additional amount of nearly 2.3 billion dong ($101,700).
In a related move, in a Question and Answer session with the finance minister, a parliamentarian said the cumulative loss stated by Grab in the past three years could be seen as tax evasion act.
Rejecting the statement by the parliamentarian, Finance Minister Dinh Tien Dung said technology-based taxi services like Grab and Uber have been active in filing tax. Their taxes have also been recalled from all examinations and inspections carried out by the sector.
On the backdrop of tax evasion allegations, a Grab Vietnam representative on Wednesday evening claimed that the company had paid 142 billion dong ($6.25 million) in taxes to state coffers in the ten months through October this year.