Friday , June 21 2024

Vietnam’s game market too small for further tax

Vietnam’s video game market is too small for a special consumption tax but instead should be nurtured to full growth, observers say.

VTC Game CEO Nguyen Ngoc Bao said that Vietnam’s game industry revenues remain modest at $600 million, accounting for only 0.5% of the global market.

“Vietnamese game companies still need to be nurtured and have to bear many risks. The country’s policies are preventing them from making bigger contributions and force them to go overseas,” he said at the Vietnam GameVerse 2023 conference in Ho Chi Minh City Saturday.

Polices instead should be geared towards incentivizing game makers so that Vietnamese producers will return and work domestically, he said.

“Vietnamese game startups often choose Singapore as their headquarters thanks to the country’s supportive policies while in Vietnam there are many policy risks,” he said

A special consumption tax on online video games was recently proposed by the Ministry of Finance, which said that the tax is needed to adjust consumers behavior.

Le Quang Tu Do, Head of the Department of Radio, Television and Electronic Information under the Ministry of Information and Communications, said that there are unreasonable policies implemented on the game industry, which instead should be nurtured before being taxed.

Game company VNG Corporation manager La Xuan Thang said that Singapore, Thailand and the Philippines all have specific policies to support the game industry, and associations there also advised the government on creating a legal framework for game businesses.

The special consumption tax seems to miss the bigger picture in the industry, insiders said.

Thai Thanh Lien, CEO of game studio Topebox, said: “Game producers such as me are willing to pay taxes, they are not a big problem. But government bodies should look at a bigger picture: what the game industry can bring to the economy.”

Bao said that esports data have shown that only 10% of the industry revenues come from game and 90% of it comes from selling event tickets, services, gaming equipment and other forms of promotions.

“The Ministry of Finance can skip the 10% of revenues from game to tax the remaining 90%.”

Do added that the communications ministry is working with other government bodies to issue policies that will support the game industry in the future, including reducing administrative procedures on publishing games in Vietnam.

The ministry targets to increase the revenue from video games in Vietnam from $600 million to $1 billion within the next five years and the number of businesses from 30 to 100 or 150.

The Posts and Telecommunications Institute of Technology has proposed to the Ministry of Education and Training to open a video game study.

The ministry also wants three other universities to launch a game study in the next five years.

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