The Ministry of Finance has released a detailed report on Grab Vietnam’s consistent annual losses since it began operating in the country, despite the ride-hailing app’s mushrooming popularity among local commuters.
During the fourth session of the lawmaking National Assembly which wrapped up last week, a delegate demanded that the finance ministry explain why Grab Vietnam, with a total registered capital of only VND20 billion (US$881,057), has accumulated VND938 billion ($41.32 million) in losses after three years of operating in the country.
The ministry has responded to the question with the release of a document on Wednesday detailing the company’s financial situation.
Grab made its Vietnam debut in 2014, launching in Hanoi and Ho Chi Minh City. Since then, the Malaysia-based company has adjusted its registered capital five times, totaling VND20 billion as of March 2017, according to the finance ministry.
In 2014, Grab Vietnam logged losses of VND51.6 billion ($2.27 million). The company managed to take that number to VND441.8 billion ($19.46 million) and VND444.7 billion ($19.59 million) in 2015 and 2016, respectively.
The finance ministry attributed the steep losses to massive marketing expenses and service prices set deliberately low to undercut conventional taxi operators.
Grab Vietnam, financed by its parent company in Malaysia, has borrowed $50 million from Grab Malaysia with zero interest, the finance ministry said, citing Grab Vietnam’s financial statement.
The Vietnamese ministry underlined that Grab Vietnam is considered a business with high operational risk, thus categorized as needing special tax oversight.
The finance ministry said it will cooperate with the State Bank of Vietnam and relevant agencies to review the company’s ‘borrowing’ and crack down on tax evasion or trade fraud, if any.
Grab Vietnam’s Ho Chi Minh City headquarters are in District 10. According to the district’s tax division, the company paid more than VND142 billion ($6.26 million) in taxes between January 1 and November 24, 2017.
Last week, the General Department of Taxation requested that local tax departments countrywide focus their 2018 tax inspections on ‘special’ businesses, such as Grab, Uber, online shopping platforms, and multilevel marketing companies.
Source: Tuoi Tre News