Policy and legal framework on digital economy in some countries and lessons for Vietnam

Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.Policy and legal framework on digital economy in some countries and lessons for Vietnam.

INTRODUCTION

Rationale

The conventional wisdom has always convinced that developing the digital economy would benefit a country tremendously in many different aspects The World Economic Forum states that digital economy can improve the government’s efficiency, transparency and decrease corruption level Digital transformation can also increase national GDP by enhancing workers’ productivity, modernizing manufacturing processes and forming new high-tech industries such as biotechnology or semi-conductor industry Furthermore, after the COVID-19 pandemic, the development of digital economy in developing countries are becoming more and more important as it provides many solutions that can help countries to withstand negative impacts (disrupted supply chains, travel bans, remote working, etc.) using innovative solutions (for example: online meeting platforms such as Zoom or Teams, logistics and transportation optimization with AI)

Undoubtedly, in the process of modernizing and promoting the digital economy in Vietnam, the government would need to regularly revise and update the current policy and legal framework Digital economy policies must put into account the labor force and the development of a digital society Policies related to consumer protection, data protection and cyber security law are crucial for the benefits of citizens as well as businesses Nonetheless, the current policy and legal framework has been exceptionally effective and served its purposes with a lot of effective and timely regulations such as the Law on Electronic Transactions (2005), the Law onInformation Technology (2006), the Law on Radio Frequency (2009), Law onCybersecurity (2018) (Bui, 2021) This framework needs to be continuously revised and developed based on economic and political fluctuations domestically, regionally and internationally The Vietnamese Government is quickly making a transition to e- governance as well as promoting the establishment of smart cities, 5G technology and e-commerce Hence, there is currently a dire need for comprehensive, strategic,calculated regulations and policies to advance the digital economy in order to guarantee growth and minimize potential risks Indeed, given the rapid economic, social and political changes caused by a plethora of technological developments, it is crucial for Vietnamese policy makers to look deeply into the current policy and legal framework for digital economy, study from other countries’ experiences and their development to come up with relevant and timely policies and regulations for the digital age

Stemming from the above issues, the author decided to choose the topic:

"Policy and Legal framework on digital economy in some countries and lessons forVietnam" for the master's dissertation.

Literature Review

The Policy and Legal framework on digital economy has always been the subject of many scholars and experts over the world In particular, this topic has attracted a great deal of researchers, not only Vietnamese but also foreign authors and researchers There are books, papers as well as reports addressing this issue from different perspectives such as: Donn Tapscott (1995) with the book The Digital Economy: Promise and Peril in The Age of Network Intelligence, discussing the gradual comprehensive transformation of the economy, politics and society due to digitalization Tapscott coined the term ‘Digital Economy’ and successfully laid a solid foundation for further studies in all different aspects of this new economy, such as knowledge, virtualization, digitalization, innovation, globalization He pointed out how technology would change a wide variety of sectors, including healthcare, manufacturing, education, tourism, entertainment and also stresses the importance of good leadership and transparency in the digital economy

A recent work “Think differently Think archetype Your digital economy model: A novel approach to digital transformation and policy reform” (by Huawei and Arthur D Little in 2020) categorizes different models of digital economy development In this study, countries are divided into seven groups/archetypes,which are: ICT Novice, Global Factory, Business Hub, ICT Patron, Innovation Hub,Service Powerhouse and Efficient Prosumer The study provides a thorough, tailored development roadmap for each digital economy archetype

The book “The Development of E-governance in China: Improving

"Cybersecurity and Promoting Informatization as Means for Modernizing State Governance" investigates China's e-governance framework and its impact on governance The study analyzes the application of big data in online government services, emphasizing the use of technology to enhance transparency Furthermore, it explores future opportunities and challenges for sustainable e-governance development As part of the Research Series on the Chinese Dream and China's Development Path, this work provides insights into China's development trajectory and its ongoing efforts to modernize governance through digital transformation.

The book “Taxation in the Digital Economy: New Models in Asia and the

Pacific” (by Hendriyetty, Evans, Kim and Taghizadeh-Hesary in 2023) This work discusses how countries can use their resources more efficiently to deal with rising challenges in taxation caused by digitalization Countries such as China, Australia and South Korea are all studied in-depth in terms of their challenges such as tax reforms, international collaboration in tax compliance, digitalization of taxation and online tax disputes The authors also studied how these countries are continuing to innovate and devise new strategies for these problems

The research “EU Internet Law in the Digital Single Market” by Synodinou, Jougleux, Markou and Prastitou-Merdi in 2021 studies in-depth EU Internet Law and related issues such as copyright law, digital law, fighting cybercrime, consumer and corporate protection in the digital age , it mentions a novel, relevant topic in Chapter 9: AI Law in the Digital Single Market This work discusses how the EU puts heavy emphasis on participation from all levels of government as well as the private sector in regulating AI Combined with the new AI Act, it presents valuable perspectives in defining AI as well as governance

The book “Digital Entrepreneurship and The Sharing Economy” (byVinogradov, Leick and Assadi, in 2022) This book provides a timely analysis on various issues such as the rise of artificial intelligence, cryptocurrencies, blockchain technologies and other technologies It presents a new perspective on the relationship between the platform/sharing economy and digitalization, and also discusses governance of the sharing economy The authors provide many case studies to support their perspective This is especially true in the cases of Airbnb,Uber France and Uber Spain, in which the authors suggests that new regulations need to be put in place in order to properly manage these types of platforms due to the current lack of coherent definitions and clear delegation of power.

Objectives of the research

The first goal of this study is to clearly lay out and understand the current policy and legal framework on digital economy of Vietnam and its impacts on economic and social development I try to study the history behind the current policy and legal framework on digital economy of Vietnam and potential development paths for the future based on experiences drawn from other countries I will also try and assess the effectiveness of these regulations to a certain extent, and point out how can the Vietnamese central government as well as local authorities can utilize technological developments and apply them to state management activities

The second objective of this research is unquestionably to study and provide information on successful policy and legal frameworks on digital economy of developed countries/successful economies Through these experiences, Vietnamese regulators and/or researchers of the digital economy can provide better analysis and policy recommendations on managing/organizing a digital-based economy

The third objective of this study is to provide some context of the currentVietnamese digital economy and devise some policy and regulatory framework recommendations in the short, medium and long-run.

Scope of the research

This research aims to provide an overview of the current policy and legal framework for the Vietnamese digital economy, notable experiences of some countries in developing the policy and legal framework for digital economy, and finally come up with some useful recommendations for Vietnam I employ the qualitative analysis method to examine policies for digital economy in Vietnam as well as China, Australia and South Korea Doubtlessly, I have drawn from many sources to try and give a complete definition of digital economy Besides providing assessments other countries’ digitalization programs, their effectiveness and applicability in Vietnam, I would strive to come up with solutions for developing e- governance and digital taxation Even though there are a lot more aspects to be study within digital economy, because of the vast amount of information and the number of fields it would involve, there are many facets that are not touched by this study (e- commerce policies, ICT infrastructure, education, etc.).

The significance of the study

Previous studies have touched upon many different aspects of digital economy as well as given many definitions and models related to digital economy However, there have not been any studies that provide a systematic, comprehensive approach to digital economic development in Vietnam given the vast amount of research done internationally While there have been many studies in Vietnam that have discussed the studies on digital economy definitions or solutions, they have yet to put a wide variety of perspective on the table and deliver a more holistic analysis

Despite having issued multiple regulations and policies to foster and accelerate the development of digital economy as well as e-governance, the Vietnamese government still has many struggles in propelling the digital transformation forward. Numerous new issues have arisen over the years and regulators are still finding it hard to keep up with their pace of progression There are still many gaps in regulations and policy for the digital economy in terms of developing e-government, e-commerce, taxation, intellectual property, internet and labor law Current policies and laws are still inefficient due to lack of synchronization between legal documents and gaps between legal regulations and actual implementations (Anh Minh, 2021).

By studying the limitations of the current policy and legal framework for digital economy in Vietnam, I aim to provide further foundational information for studying and developing policies in this area

From my perspective, while there are many legal documents raising the issue of digital economy development, there are not many concrete/practical policies that go along with these encompassing resolutions and decisions There has not been a lot of studies that focus on drawing upon digital economy models from other countries and their application in Vietnam Therefore, based on digital economy development strategies, programs and related documents from the European Union and countries such as China, Australia, South Korea, this study would provide more information on digital economy policies and models for reference purposes as well as solutions for developing digital economy in Vietnam.

While the second and third objectives of this study aims to look at other countries’ experiences and possible improvements in policies and regulations for digital economy in Vietnam, due to the vast number of fields that these types of policies cover, I was only able to study e-governance, taxation, AI and sharing economy governance in the digital economy There are many other areas in digital economy left to be discovered in terms of policy-making, such as e-commerce, labor laws, building ICT infrastructure or education for the digital age Furthermore, this study is purely qualitative, which means that analyses may not be precisely accurate.The results from this study would certainly benefit from quantitative studies as they will provide solid support for policy recommendations.

Research methodology

This study explores the digital economy in Vietnam and globally using qualitative research methods A comprehensive desk study was conducted to establish a comprehensive definition of the digital economy, drawing upon experiences from other countries and identifying policy recommendations for Vietnam The study examines various aspects, including e-governance, digital taxation, AI governance, and sharing economy It analyzes case studies from regions like the EU, China, South Korea, and Australia Based on these findings, the study evaluates the advantages and disadvantages of different development strategies considering Vietnam's current policy and legal framework Subsequently, lessons and recommendations are derived to inform the Vietnamese government's decision-making process.

Thesis structure

The study has five main parts (other than the table of contents, list of acronyms and abbreviations, list of figures, summary of the research and references), which are the following:

Chapter 2: Theoretical foundations of the policy and legal framework for digital economy

Chapter 3: Experiences of some countries on the policy and legal framework for digital economy

Chapter 4: Current situation of the policy and legal framework for digital economy in Vietnam

THEORETICAL FOUNDATIONS OF THE POLICY AND

Concept of digital economy

In order to understand thoroughly and provide recommendations for the current policy framework on digital economy in Vietnam, we would first have to define several concepts According to Donn Tapscott, the author who coined the term

“digital economy”, this new economic model relies heavily on technology and information: “The new economy is also a knowledge economy based on the application of human know-how to everything we produce and how we produce it” (Tapscott, 1995, p 17) A report by the UNDP states that the digital economy can be considered as “the entirety of sectors that operate using Internet Protocol (IP)- enabled communications and networks” (Lovelock, 2018, p 5-6) The digital economy can be interpreted as “a broad range of economic activities that include using digitized information and knowledge as the critical factor of production”, comprising of “modern information networks as a virtual activity space and the effective use of ICT as an essential driver of productivity growth and economic structural optimization” (Ha, 2020) Certainly, the digital economy contains various sectors that “operate using Internet Protocol (IP) – enabled communications systems – such as mobile networks, e-payment systems and public service networks” (Ha, 2020).

Bukht and Heeks proposed a structured definition of the digital economy,including the core digital economy, the digital economy and the digitalized economy The core digital economy includes hardware manufacturing, information services software and ICT consulting (Thuy, Ha et al) The digital economy has digital services and platform economy in addition to the factors mentioned above In addition, the digital economy also includes the gig economy and some factors of the sharing economy The most developed, all-round version of the digital economy is the digitalized economy This is the digital economy with e-businesses, e-commerce, industry 4.0, precision agriculture, algorithm economy, sharing economy and the gig economy.

Figure 1: Scope of digital economy models

The digital economy significantly transforms production by integrating knowledge and technology Even in traditional industries like agriculture, technological advancements like chip-equipped agricultural machinery pervade (Tapscott, 1995, p.17) Moreover, the digital economy differs markedly from traditional ones, introducing new industrial sectors in computing, communications, and content, fundamentally altering the economic landscape and creating novel opportunities for innovation and growth.

Technological advancements have spurred the emergence of novel industries, such as the interactive multimedia sector, exemplified by social media platforms like Facebook and Instagram Furthermore, the digital economy has given rise to the sharing economy, with prominent players like Uber and Airbnb These new industries have significantly transformed social and economic dynamics Their impact is particularly evident in the labor market, shaping policy formulations and prompting further research.

There are several novelties about the digital economy that are major differences to the traditional economic models First, by utilizing technological development, digital economies are able to foster more “interconnectivity of networks that traffic can travel across and between” (Lovelock, 2018, p.12). Transportation and logistical services are much more advanced that international trade has become very efficient, resulting in interconnectedness between trade partners As a result, political stability and negotiations have become more prevalent instead of conflicts The second new aspect of the digital economy is interoperability of platforms, which means “traffic can run effectively across different types of networks (e.g., from telecoms to banking to educational to health networks and so on)”, resulting in economies of scope (Lovelock, 2018, p.13) These two factors drive down cost and create more efficiency, but sometimes they are resisted to create dominance and therefore need supporting regulations from the government

Due to many changes in the process of economic digitalization, regulators have to face a plethora of problems, namely advancing “financial inclusion without focusing on connectivity, social media, identity profiling”, advancing “effective universal education without consulting data analytics, behavior profiling, content delivery, and collaborative communication”, surpassing “the traditional risk management-oriented approach failing to deliver expected regulatory control or provide adequate consumer protection” (Lovelock, 2018, p.14) I addition, regulators also have to review competition laws in the digital economy with the advent of many new types of players that have not been properly defined Indeed,

“competition regulators need to arm themselves with new concepts” (Lovelock,

Another challenge to regulators is finding ways to take advantage of technology for state management is delivering “certain public services in a more targeted way at minimal cost with increased agility and impact” (Lovelock, 2018,p.14) A few examples that have already taken place in Vietnam are digital identity and authentication system, which would provide citizens services at a significantly lower cost Government officials need to keep themselves up-to-date with applicable technologies in order to improve service quality from public administrations

Generally, the digital economy is economic activities, commercial transactions and professional interactions that are based on information and communications technologies

In the case of Vietnam, some notable problems regarding policy/regulation framework for the digital economy include: institutions and policies not being synchronized, the set of indicators and measuring tools for the digital economy having been issued but not completed (no unified measurement method exists), under-developed digital infrastructure (average fixed and mobile broadband networks speed), human resources for digital transformation and digital economy development lacking in both quality and quantity (Industry and Trade Magazine,

Nowadays, finding the correct strategies to develop digital economy is a common goal of many policy makers in every country Nonetheless, there is no “one size fits all” model that can be applied across the board Depending on the country’s economic, social, environmental, infrastructure, technological, demographic background as well as the development of the educational system, there will be different tailored approaches that are best suited for each nation In a recent study in

In 2020, Huawei and Arthur D Little identified seven archetypes for digital economy development: Innovation Hub, Efficient Prosumer, Service Powerhouse, Global Factory, Business Hub, ICT Patron, and ICT Novice While countries may embody multiple archetypes, such as China's recognition as both an Innovation Hub and a Global Factory due to its ICT exports, Malaysia's case exemplifies this dual nature.

“primary archetype is Global Factory; nevertheless, the country also represents salient characteristics of a Service Powerhouse, scoring in the top 15 percent of countries in terms of ICT value” (Huawei and Arthur D Little, 2020).

In order to develop a relevant strategy for digital economy, it is necessary to define clearly the models of digital economy mentioned above First and foremost, countries who adopted the Innovation Hub model are the ones who benefit the most from the ICT industry These countries are leading in technological development as well as in commercializing these solutions Examples to this can be found in the case of South Korea or Sweden This type of model can only be built based on a strong foundational applied research and technological development “across the public, private and academic sectors” (Huawei and Arthur D Little, 2020) This level of commitment, support and synchronization can only be achieved through large investments and high level of technical abilities that have been acquired through decades of experience Countries with this type of digital economy model tends to create a lot of demands for their products with cutting-edge technologies, such as in the case of Apple, IBM, Salesforce, Google and many other firms in the United States

The second archetype is the Efficient Prosumer model, which is similar in terms of R&D and product development compared to the Innovation Hub model. The differentiating factor is that “Efficient Prosumers focus their efforts on developing technology solutions that will enhance the competitiveness of a single or a few economic sectors within their countries”, as in the case of German automobile industry This model of digital economy benefits certain specific industries due to the spillover effect: “The digitalization effort in the core industries leads to spin-off benefits in other industries” (Huawei and Arthur D Little, 2020, p.21)

The Service Powerhouse model can be found in countries like Ireland orPhilippines, where a large number of ICT workers enabled companies to enjoy abundant and cheap labor The Global Factory model is similar to ServicePowerhouse in that it also requires an abundant number of labor, however, the quality of labor is not as high Nonetheless, cheap labor is a crucial factor that makes this digital economy model competitive, with notable representatives such as

Concept of policy and legal framework of digital economy

In addition to a clear definition of digital economy, it is also necessary to define the concept of policy and legal framework of digital economy According to the Cambridge Dictionary, legal means “connected with or allowed by the law” or

The concept of a policy and legal framework encompasses a nation's system of laws, regulations, and government plans This framework provides a structure for decision-making and outlines the rules and principles that guide national affairs By combining the definitions of "law," "policy," and "framework," we can understand this framework as a cohesive system that establishes the legal and governance parameters within which a country operates.

Policy framework can also be defined as something that “includes the system of administrative regulations, laws and strategies of the state on which the government, government agencies and localities operate the economy in order to achieve development goals in each given historical period” (Duc Nhuong, 2019). There are many functions to a good policy framework, including attracting foreign investor and facilitating trade Another definition to policy framework is provided by ICAC (Independent Commission against Corruption – South Australia): “A policy framework provides an overarching structure that guides how policies and procedures will be developed, approved, communicated and reviewed” Moreover, this organization states that “effective policy framework clearly documents the processes to be followed at each stage of the policy life cycle” (ICAC, 2022)

The policy and legal framework for the digital economy is a system of rules, regulations, guidelines, and national strategies designed to foster economic activities, commercial transactions, and professional interactions that leverage information and communication technologies A well-structured and comprehensive framework promotes growth and sustainability within the digital economy by providing guidance, protecting rights, and ensuring fair competition By establishing clear rules and standards, it facilitates trust, innovation, and international cooperation, ultimately creating a thriving and resilient digital environment.

“improve the effectiveness of policies and reduce the risk of non-compliance” (ICAC, 2022, p.1) Having a good policy and legal framework for digital economy would allow Vietnam to thrive digitally transforming its economy and industries A good policy and legal framework would also provide clear policy hierarchy and policy development process, proper consultation from government agencies as well as businesses and transparent mandates of power

Policy frameworks, developed by governments to guide actions, establish guidelines, principles, and procedures In contrast, legal frameworks are composed of laws and regulations enforced by state power The policy framework offers guidance, while the legal framework mandates adherence This distinction clarifies the roles of each framework: policy guides, while law governs behavior.

Characteristics and determinants of the policy and legal framework

There are several noteworthy characteristics of the policy and legal framework for digital First and foremost, the digital economy is constantly changing with the incessant advents of new technologies As a result, Lovelock mentions in his study that “the pace of innovation has accelerated and rapid technological changes require governments to gauge, understand, make and implement regulatory decisions faster” (Lovelock, 2018, p.45) It is undeniable that agility (flexibility) is a great quality for the government to cultivate in developing a policy and legal framework for digital economy, as this would help alleviate “internal constraints of agencies”, “the risks of overregulation” and increase the efficiency in handling “licensing” and business registration” (Lovelock, 2018, p.45)

Another significant characteristic of the policy and legal framework of digital economy is ‘cross-sectoral policy making’ Indeed, in traditional models of governance, “public administration functions are based on silos – where public servants’ expertise is mostly limited to a specific policy domain such as agriculture, education or infrastructure” (Lovelock, 2018, p.44-45) According to Lovelock,

“specialized agencies alone won’t create a cross-sectoral communication process without establishing formalized communication channel and collaboration methods” Because of this, many countries have created “distinct entities in charge of the digital economy – agencies like the MDES in Thailand and MDEC in Malaysia, or specialized departments within the Prime Minister’s Office” (Lovelock,

2018, p.45) Another instance to the notion that distinct entities taking charge of digital transformation can be found in Singapore with GovTech, which “established a cluster group that collaborates closely with sectoral agencies (in finance, health, education etc.) to ensure that newly developed digital services answer the needs of their users” (Lovelock, 2018, p.45).

The final characteristic of the policy and legal framework for digital economy that Lovelock states in his study is having a multi-stakeholder approach This means

Effective digital development requires collaboration among governments, the private sector, civil society, and academia in agenda-setting, regulation creation, and initiative implementation Public-Private Partnerships (PPPs) facilitate such cooperation, but their success relies on genuine partnerships with shared responsibilities and accountability One example is Malaysia's M-Powered Platform, a partnership between the Ministry of International Trade and Industry and Microsoft to create an employment portal for persons with disabilities.

In terms of determinants of the policy and legal framework for digital economy, there are four main determinants that regulators need to pay close attention to They are: digital strategies and regulations, digital infrastructure, data and digital skills (Nazir, 2021) In terms of digital strategies and regulations, it is crucial for countries to tailor their digital economy approach to their specific political, economic and social conditions Examples to this notion can be found in China, which intends to make use of data and applications to “foster new business models” or Singapore’s “Digital Economy Framework for Action that focuses on digitalizing industries, integrating ecosystems, and transforming the ICT sector” (Nazir, 2021)

When it comes to digital infrastructure, businesses must modernize themselves regularly to stay competitive Indeed, “the evolution of infrastructure is characterized by two overarching trends: the move toward the edge and the uptake of cloud platforms” (Nazir, 2021) Organizations are utilizing technologies to improve and optimize their administrative, manufacturing as well as other processes. The private sector needs to cooperate with the public sector in making investments into new technologies such as “5G and Wi-fi 6”, “data centers and the cloud – sensor and camera networks, applications and platforms” for implementation in various cases “such as remote triaging in connected ambulances in the healthcare sector, remote surveys by mobile robots in hazardous environments in the energy sector, and factory automation in manufacturing” (Nazir, 2021)

Another factor affecting the development of digital economy and its policy and legal framework is data Because of the nature of the digital economy is being

“primarily a data-driven economy”, regulators need to devise policies and laws that cater to this need (Nazir, 2021) A wide variety of issues need to be covered by policy makers, including “IoT platforms, devices, networks, and AI and ML tools” as well as personal data protection and consumer protection (Nazir, 2021)

The final determinant to the policy and legal framework of digital economy is digital skills According to Nazir, there are two main categories to digital skills:

“core ICT skills – such as programming, applications, infrastructure, cybersecurity, and data analytics – and generic ICT skills required by all employees to work in a digitalized environment” At the current rate of technological development, it is undeniable that knowledge and information taught in schools as well as universities

“often fall short and quickly become outdated” (Nazir, 2021) It is essential for policy makers to devise mechanisms and methods to enhance “the ICT skills of graduating students and the wider workforce”, as this would both increase the capability of the private sector as well as prepare government officials to “adapt a new generation to changing economic scenarios and avoid disruptions to the labor market” (Nazir, 2021)

Figure 3: Key defining trends and key enablers of the digital economy

Roles and benefits of the policy and legal framework of digital

The digital economy's pervasive presence significantly influences contemporary society, spanning commerce, law, governance, and consumer goods In China, the digital economy's GDP contribution surged from 30.61% in 2016 to 41.5% in 2023, while in the U.S., it expands at an annual rate of 10% Notably, the U.S.'s fastest-growing companies are actively engaged in the digital economy, driving its exponential growth.

The digital economy encompasses a diverse range of industries, including e-commerce, AI, and Industry 4.0 The rapid growth of these sectors is expected to create 400 million job openings globally by 2035 Given the wide-reaching impact of the digital economy, it is imperative for governments to actively engage in its development to promote stability, expeditious progress, and a systematic approach to its transformation.

Since the Industrial Revolution 4.0 is based on digital economy, every country in the world will gradually move to a knowledge base economy According to recent estimates, Vietnam will need about 100,000 technology companies in 2030 in order to carry out the vision “Make in Vietnam” with enterprises mastering technologies, designing and manufacturing their own products (Hien, 2022) To achieve this, Vietnam needs a comprehensive strategy in developing the necessary infrastructure and labor force Indeed, it is pivotal to build “power plants, highways, railways, and public utilities”, and infrastructure for 5G technology, data centers, R&D facilities for semiconductors (Mei, 2022, p 7) In addition, according to Dang Thi Viet Duc

(2022), Vietnam needs to increase investment in R&D Moreover, it is crucial that the Southeast Asian nation put down heavy investments over a lengthy period of time in education It cannot be denied that the young, flexible, studious and innovative human resources will be the foundational factor in the transition ofVietnam from the current Global Factory model of digital economy to InnovationHub or Efficient Prosumer.

EXPERIENCES OF SOME COUNTRIES ON THE POLICY

Policy and legal framework of e-government and digital taxation in

3.1.1 Brief history of e-governance in China

Vietnam's comprehensive digital transformation strategy encompasses three key pillars: e-government, digital economy, and digital society E-government stands as the cornerstone, providing a solid foundation for subsequent digital advancements China, sharing similar sociopolitical and economic characteristics, has made significant strides in e-government development Its systematic approach and successful implementation serve as a valuable reference for Vietnam as it seeks to enhance its digital infrastructure and policies Notably, China's extensive use of e-transactions, online citizen services, and data-driven governance demonstrates the transformative impact of a well-defined e-governance framework, paving the way for digital economic development.

In order to fully understand how China e-governance got so successful, we must first look at the development process of e-governance here In total, “theChinese E-governance construction has undergone five phases of development: (1) the pilot phase characterized by data-processing (1973-1983); (2) the vertical construction phase characterized by information management (1983-1993); (3) the beginning of key transaction systems characterized by transaction processing (1993-2000); (4) the comprehensive promotion phase characterized by E-governance guiding national phase characterized by a service orientation; and (5) the deep application phase characterized by a service orientation (2006 on ward)” (Du, Yu and Yang, 2019, p.1) The first phase of developing digital economy in China (1973-

1983) revolved around the country quickly “promoting the application of computers" as well as focusing on data processing, which was epitomized by national census data: When China carried out its third national census in 1999, with the help of the United Nations, it formed the first prototype central and provincial- level computer system in China and completed the massive tasks of processing 40 billion characters of raw data from a population of 1 billion people (Du, Yu and Yang, 2019, p.1) This is undoubtedly a huge achievement even in today’s standards.

The second phase of China's e-governance evolution, known as the vertical construction phase, spanned from 1983 to 1993 and focused on information management The State Council Electronics Promotion Group, later renamed the State Council Electronic Information Systems Promotion and Application Office, played a pivotal role in fostering the use of electronic information technology to modernize traditional industries During this period, China made significant strides, including:

(1) government technical support capability; (2) the computer equipment deployment proficiency of government departments and their subordinate information organs significantly improved, laying a solid foundation for the construction of government information technology; (3) a large number of databases were developed mainly to manage information, and significant progress was made in the digitalization of government information resources (Du, Yu and Yang, 2019, p.3)

After this period of enhancing government capacities in digital technologies, China began to move on to a third phase of key transaction systems from 1993 to

2000 The Chinese government implemented the “three Goldens”, which consisted of the “Golden Bridge”, the “Golden Customs” and the “Golden Card” These massive programs are designed to “modernize the country's information technology infrastructure by establishing a data communications network” (CNET, 1997) TheGolden Bridge project had the participation from major companies such as Intel,

Cisco or IBM The project aimed to build a network across China with the backbone being the “interconnected space satellite and ground fiber optic networks linked to a domestic private network” (CNET, 1997) The Golden Card project aimed to use telecom networks to build banking and credit card system countrywide, and the Golden Custom project aimed to “create paperless trading by automating customs checks and eliminate cash transactions for international trade” (CNET, 1997) There were also the Golden Tax program which constructed the “value-added tax computer cross-auditing systems in 50 pilot cities”, and the Golden Sea project which

The Government Online program of 1999 enhanced government information technology and heightened societal awareness of its importance The program, along with earlier initiatives that established a centralized office automation network, laid a solid foundation for the subsequent development of digital government and economy in the 2000s.

The fourth phase of e-governance development in China started from 2000 and ended in 2006 During this period, the CPC Central Committee “reestablished the Leading Group for National Informatization” (Du, Yu and Yang, 2019, p.6) The Group concentrated on the construction of E-governance and implemented programs that are considered the upgraded versions of the Three Goldens The fifth and final phase of E-governance development was from 2006 until now, “characterized by a Service Orientation” (Du, Yu and Yang, 2019, p.6) Some of the most noteworthy events in this period are: the launching of the People’s Republic of China Central People’s Government web portal in 2006, the issuance of the “Overall Framework for National E-governance” by the Leading Group for National Informatization, the

“National E-governance Program for the Twelfth Five-Year Plan” by the MIIT in

2011, the “National E-governance Informatization Program Construction Plan for the Twelfth Five-year Plan” and “the establishment of the Central Leading Group for Cyberspace Affairs” (Du, Yu and Yang, 2019, p.7-9).

Having meticulously examined the history of e-governance development in China, Du, Yu and Yang concluded in their book that “the tremendous achievements in E-governance are closely related to national strategy and overall planning for E- governance” (Du, Yu and Yang, 2019, p.10) One outstanding point that these authors made is that China did not follow world trends in e-governance blindly, partly due to the fact that there has not been any consensus on the best model for e- governance development Truly the country was cautious about adopting policies based on international experiences China has a very ancient and distinct culture, hence the nation must pay close “attention to integrating economic and social development needs and cultural background in order to formulate an E-governance development strategy with Chinese characteristics” (Du, Yu and Yang, 2019, p.10). Local authorities in China had to integrate “economic, social and informatio4n technology trends” very carefully through “major policies with profound impact at the appropriate time” for the digital transformation of governance” (Du, Yu and Yang, 2019, p.10)

3.1.2 Policy and legal framework for E-governance in China

China began constructing infrastructure for e-governance in early 1990s, but it faced many obstacles due to “lack of coordination in system design, redundant construction, information silos, and technical barriers” (Du, Yu and Yang, 2019, p.13) As a result, the Golden Programs were implemented as the start of a more methodical and organized approach One of the most important documents for the structured development of e-governance in China is the Document No.17 (the Leading Group on National Informatization Guiding Opinions on E-governance Construction in China), promulgated in 2002 This document clearly states the basic contents of the overall framework for e-governance in China, “commonly known as one site, two networks, four databases, and twelve goldens” (Du, Yu and Yang,

2019, p.14) This refers to one government web portal “with integrated applications”, the unified E-governance network that consists of the government intranet and extranet, “basic government information resources of the population information database, the legal persons (corporations) and work units information database, the national resource and spatial and geographic information database, and the macroeconomic database” and 12 golden programs The 12 golden programs are the key transaction systems, including the “office work transaction resources system, Golden Customs, Golden Tax, financial regulation (including Golden Card), macroeconomic management, Golden Finance, Golden Shield, Golden Audit, social security, Golden Agriculture, Golden Quality, and Golden Water” (Du, Yu and Yang, 2019, p.14) This ordered framework is distinct proof to a clear vision for enhancing public services using digital technologies, correctly applied to best adapt with the particular cultural and social factors in China

There are five crucial documents after the issuance of Document No.17 that defined the development path of E-governance in China:

The Overall Framework for National E-governance issued by the Leading Group for National Informatization in 2006; (2) the “National Informatization Development Strategy (2006-2020), jointly issued by the CPC Central Committee General Office and the State Council General Office in 2006; (3) the Program for Informatization of Development of the National Economy and Society for the Twelfth Five-Year Plan, issued by the National Development and Reform Commission (NDRC) in 2008; (4) the Program for National E-governance for the Twelfth Five-Year Plan, issued by the Ministry of Industry and Information Technology in 2011; and (5) the State E-governance Informatization Program Construction Plan for the Twelfth Five-Year Plan, issued by the NDRC in 2012 (Du,

All of the later documents on e-governance development are based on the overall framework (Document No.17) The framework has five sections, including

“services and applications, information resources, infrastructure, laws and regulations, standardized systems and the management system” (Du, Yu and Yang,

2019, p.18) The Chinese government heavily focused on enhancing citizen experiences whenever they use government services Such service-oriented approach managed to drive up demand and further e-governance development through a market mechanism This factor, as well as business and system construction, are further emphasized in the National Informatization Development Strategy 2006-

2020, which clarifies “strategic positioning, construction ideas, and priorities for E- governance” (Du, Yu and Yang, 2019, p.18) Not only the Chinese government wanted to strengthen their control over the cyberspace, it also managed to do so by building a calculated system in terms of management mechanism and internet infrastructure Their focus steadily “shifted from emphasizing software and construction” to putting more weight into “operating system applications and the development and use of information resources” as well as “comprehensive applications” and tightening the connection in technology and construction of the overall framework (Du, Yu and Yang, 2019, p.20).

Policy and legal framework for Tax administrations in Australia 43 3.3 The Republic of Korea’s Tax Administration in the digital age

The Australian Taxation Office (ATO) recognized the crucial role of technology in combating tax avoidance and evasion while facing challenges with its existing systems' complexity and maintenance costs In 2003, the ATO initiated the Easier, Cheaper, and More Personalized Program, a comprehensive technology change initiative designed to replace multiple specialized systems with a single processing and management system This platform aimed to streamline revenue management, simplify compliance for taxpayers and advisors, and improve data matching capabilities for audits through dedicated portals for tax agents and businesses Despite its transformative benefits, the program took seven years to complete at nearly twice the projected costs.

With the rise of the digital economy, in 2010, the ATO “launched a reinvention program with the following goals (ATO 2017a: 5): (1) Make it easier for people to participate, (2) deliver a contemporary and tailored service, (3) ensure purposeful and respectful relationships, and (4) be a professional and productive organization” (Hendriyetty et al (Eds), 2023, p.169) Recent developments such as the system outage in 2016 or the implementation of the Single Touch Payroll also brought the ATO some valuable lessons that other countries can adopt Pertaining to the 2016-

2017 online services outages, the ATO concluded that it should “Identify the optimal balance of performance, stability, resilience and cost as an overarching consideration in designing and managing infrastructure (ATO 2017b: 7, recommendation 1.1)” (Hendriyetty et al (Eds), 2023, p.170) In terms of the implementation of the Single Touch Payroll (STP) in 2018, the agency came to a conclusion that it needs to

“improve business communication on system performance (key services are now reported in real time on their website), and explain when and how general waivers apply” (Hendriyetty et al (Eds), 2023, p.170).

The ATO was very astute in its cooperation with the private sector, “partnering with software developers to integrate and automate regular ATO interactions as a by-product of businesses’ normal accounting processes” (Hendriyetty et al (Eds),

STP (Single Touch Payroll) accounting software automates payroll reporting for employers, including salaries, wages, and superannuation contributions By June 2019, over 160,000 employers reported information for 8.1 million individuals STP aided government regulation during the COVID-19 pandemic by facilitating remote interactions The ATO's digitalization strategy focuses on using technology and data to promote voluntary tax compliance by simplifying interactions.

One of the most important factors of the digital economy is data analysis for the purpose of enhancing customer experience With Australia, the ATO use data and behavioral economics techniques to “exploit taxpayer insights to prevent and preempt noncompliance (ATO 2020a: 15)” (Hendriyetty et al (Eds), 2023, p.176). For example, data in cryptocurrency transactions can be “used to remind taxpayers through the pre-fill service to report income” (ATO 2020a: 16)” (Hendriyetty et al (Eds), 2023, p.176)

In terms of battling tax evasion or avoidance and crimes in the digital age, the ATO set up two flagship taskforces The first one is the Tax Avoidance Taskforce,

“which works with partner agencies and other jurisdictions to investigate the most aggressive multinational tax avoidance arrangements, including profit shifting (ATO 2019b)” (Hendriyetty et al (Eds), 2023, p.176) The second taskforce is an ATO-led organization called the Serious Financial Crime Taskforce, which aim to tackle cybercrimes that affect tax and superannuation systems, offshore tax evasion and illegal phoenix activity (Hendriyetty et al (Eds), 2023, p.176)

When it comes to data sharing for research and development purposes, the ATO is quite meticulous It receives around 600 million transactions yearly (ATO 2020c), and this number is likely to increase Because of the sheer amount of data being shared and analyzed, the Australian government issued the Privacy Act 1988 and embedded in its tax laws strict secrecy provisions (Hendriyetty et al (Eds), 2023, p.178) When a government agency, such as the ATO, wants to use public data, they must publish their studies if it involves data from more than 5,000 people In addition, the agency would also have to clarify the purpose of the study, “what is being collect, how it will be used, and with which agencies or organizations data will be shared (ATO 2020d)” (Hendriyetty et al (Eds), 2023, p.178)

3.3 The Republic of Korea’s Tax Administration in the digital age

The Korean government wanted to “shift from processing simple, manual tax data to generating meaningful, automated information through the sophisticated management” of tax payers’ data (Hendriyetty et al (Eds), 2023, p.192) TheRepublic of Korea’s digital tax system originated with the birth of the Tax Integrated

System (TIS) in 1997 Through this system, the government can efficiently manage taxpayer information and “trace tax payers subject to tax filings, as well as noncompliant taxpayers subject to tax audits” (Hendriyetty et al (Eds), 2023, p.192).

The TIS was upgraded in 2015, becoming the Neo Tax Integrated System (NTIS) With the e-taxation knowledge accumulated over 20 years, combined with advanced technological developments, the project was initiated to “reorganize 22,300 computer programs and 180 billion data items” (Hendriyetty et al (Eds),

Indonesia's taxation system underwent a transformation in 2023, centralizing tax filing processes through a common portal This simplified system replaced the former independent websites, allowing for periodic tax filings and limited pre-filled services Additionally, it introduced new functionalities such as late filings, tax return amendments, and correction requests The unified system streamlines processes, reduces costs and time for both taxpayers and officials, and enhances data security Furthermore, it promotes tax compliance, facilitates revenue analysis, and enhances information sharing to combat tax evasion, leading to increased tax revenues For instance, the unit costs per taxpayer significantly decreased from $8 to $0.8 between 2001 and 2006, demonstrating the system's effectiveness The administrative costs were also reduced by a factor of three from 1984 to 2018, highlighting its significant impact on the administrative efficiency of tax collection.

AI governance and sharing economy in the European Union

3.4.1 AI governance in the European Union

Artificial intelligence has been rising recently, with the advent of ChatGPT and so many other tools for illustration, data analysis, art, research, finance, education These tools are readily accessible more than ever: “Several generative

AI models, including ChatGPT and an image generator called Stable Diffusion, can now be accessed online for free or for a low-cost subscription, which means people across the world can do everything from assemble a children’s book to produce computer code in just a few clicks” (Heilweil, 2023) Through machine learning and exposure to lots and lots of data, these generative AI systems can “train and eventually learns to mimic” (Heilweil, 2023) AI can certainly transform the way human live by making their lives easier, from automating simple tasks such as writing emails or even drafting legal documents (for example: contracts) (Heilweil, 2023).

While AI’s potentials and benefits cannot be disputed, they are created by tech companies that “want to improve their models and technology, and people playing around with trial versions of the software give these companies, in turn, even more training data” (Heilweil, 2023) Eventually, these tools would be sold to people for profit Therefore, it is crucial that governments take early initiatives to regulate the

AI sectors “from a strategic foresight perspective on how the market is expected to develop over the next 10-15 years” (Synodinou et al., p.233, 2021)

The European Union has taken many actions to start regulating artificial intelligence, such as publishing “Ethics Guidelines for trustworthy AI”, and launching “the White Paper on European approach to excellence and trust” that facilitates a synchronized development of AI across European countries to avoid fragmentation (Synodinou et al., p.238-239, 2021) A uniform development of AI in the EU, combined with “a European governance structure on AI in the form of a framework for cooperation of national competent authorities” would “allow to avoid fragmentation of responsibilities, increase capacity in Member States” (Synodinou et al., p 239, 2021) In short, the EU’s governance plan for artificial intelligence depends on the fervent, timely participation from all of its member countries as well as “all consumer organizations and social partners, businesses, researchers, and civil society organizations” (Synodinou et al., p.240, 2021)

Recently in June 2023, the EU Parliament “passed a draft law known as the A.I Act, which would put new restrictions on what are seen as the technology’s riskiest uses” (Satariano, 2023) While the final version of this law has not been passed yet, it contains rules that “are the first comprehensive regulations for AI” (Browne, 2023) This bill “takes a “risk-based” approach to regulating A.I., focusing on applications with the greatest potential for human harm” (Satariano,

2023) AI risks are categorized into three main types:

First, applications and systems that create an unacceptable risk, such as government-run social scoring of the type used in China, are banned Second, high-risk applications, such as a CV-scanning tool that ranks job applicants, are subject to specific legal requirements Lastly, applications not explicitly banned or listed as high-risk are largely left unregulated (The AI Act)

The Act also provides a neutral definition of Artificial Intelligence, which is:

“a software that is developed with one or more of the techniques and approaches listed in Annex I and can, for a given set of human-defined objectives, generate outputs such as content, predictions, recommendations, or decisions influencing the environment they interact with” (Sioli, 2021)

The proposed European AI Act classifies AI applications into three risk categories: unacceptable, high, and limited High-risk AI, like medical devices or recruitment tools, is allowed but requires strict compliance with requirements These include implementing a quality management system, maintaining technical documentation, logging system operations, undergoing conformity assessment, registering in the EU database, affixing CE marking, and conducting post-market monitoring AI with transparency obligations, such as impersonation bots, is also permitted but must adhere to information and transparency requirements.

This Act is deemed to aim at building “safeguards on the development and use of these technologies to ensure we have an innovation-friendly environment for these technologies such that society can benefit from them” (Brown, 2023) Truly,the European Parliament set out “to make sure that AI systems used in the EU are transparent, traceable, non-discriminatory and environmentally friendly” (EU AI Act, 2023) By having AI systems overseen by people instead of relying on automation, the EU can prevent potential “harmful outcomes” (EU AI Act, 2023). Policy objectives of the EU on AI can be summed up to four main goals: setting enabling conditions for AI development and uptake in the EU” (acquire data and enhance computing capabilities), making “the EU the right place; excellence from lab to the market”, “ensuring AI technologies work for the people” and building

“strategic leadership in the sectors” (Sioli, 2021).

While the EU is much far-ahead comparing to other nations in terms of regulating artificial intelligence, it also has to face certain challenges A highly controversial area of debate revolves around facial recognition: “The European Parliament voted to ban uses of live facial recognition, but questions remain about whether exemptions should be allowed for national security and other law enforcement purposes” (Satariano, 2023) Another area of debate is the use of biometric data on social media sites to build databases, with tech leaders stating that this would be hard to comply with while policy makers want to ban this practice entirely (Satariano, 2023).

3.4.2 The sharing economy in the European Union

The EU has not agreed on a common definition of the sharing economy, and therefore has been describing “established or emerging business phenomena such as

‘collaborative consumption’ (Belk, 2014), ‘gig economy’ (De Stefano, 2016),

‘access-based consumption’ (Bardhi & Eckhardt, 2012), ‘the mesh’ (Gansky, 2010), and ‘peer platform markets’ (OECD, 2016)” (Vinogradov, Leick and Assadi, p.182,

Interchangeably used terms "sharing economy" and "collaborative economy" share a common definition rooted in three key elements: service providers, users of their services, and intermediaries connecting these participants through online platforms These intermediaries facilitate transactions between users and service providers, enabling the sharing of assets, resources, time, and skills within the collaborative economy.

According to Vinogradov, Leick and Assadi, the EU is very careful when it comes to regulating sharing economy platforms The EU did not only choose to regulate the sharing economy alone, but it “has preferred to look at the broader notion of online platforms – of which sharing economy platforms are but one example – and to only address clearly identified problems that relate to a specific type or activity of online platforms where the existing legal framework cannot be applied to resolve those problems” (Vinogradov, Leick and Assadi, p.184, 2022) By this approach, the government has promulgated the Platform-to-Business (P2B) Regulation 2019/1150 that “addresses fairness and transparency issues in some types of online platforms” (Vinogradov, Leick and Assadi, p.184, 2022) The sharing economy is also regulated in the EU through the existing laws on e-commerce such as the E-Commerce Directive 2000/31/EC (ECD) (Vinogradov, Leick and Assadi, p.

With the EU’s approach, regulating the platform economy “must be resolved on a case-by-case basis and depends on how the particular platform is set up” (Vinogradov, Leick and Assadi, p.184, 2022) For example, governments would have to determine “whether the sharing economy platform can be classified as a provider of online intermediation services, known in the ECD as ‘information society services’ (ISS), or whether it is in fact a provider of the underlying service (e.g transport, accommodation) being intermediated via the platform” (Vinogradov, Leick and Assadi, p.184, 2022) One example to this notion can be found in the case of Uber Spain and Uber France These platforms “prefer to be classified as an ISS provider and not a provider of the underlying service” because they would be able to gain more benefits (Vinogradov, Leick and Assadi, p.185, 2022) For example, they can operate in any country in the EU simply by “complying with the rules for the provisions of ISS services in the country where the platform is established” (internal market rule) and “does not have to comply with any prior authorization or similar requirements in the country where the ISS is offered” (Vinogradov, Leick and Assadi, p.185, 2022) This allows companies to expand much more easily and avoid a lot of administrative tasks, lowering operating costs On the other hand, when the main service of the platform “is not the provision of intermediation but rather the underlying service being intermediated via the platform”, the platform provider will have to comply with rules pertaining to the underlying service (Vinogradov, Leick and Assadi, p.185, 2022)

The CJEU provides some criteria in the cases of Uber Spain, Uber France and Airbnb Ireland to determine whether these platforms are ISS provider or not These are: (i) whether the intermediation is indispensable for underlying services, (ii) the price setter being the platform or the peer service provider, and (iii) the controller of qualities of assets (Vinogradov, Leick and Assadi, p.186, 2022) For example, in the case of Airbnb Ireland, “the CJEU came to diametrically opposed conclusions and held that Airbnb offered ISS and was not a real estate agent” and that “the service provided by Airbnb was not indispensable to the provision of accommodation service from both the point of view of the guests and the hosts who use the platform” (Vinogradov, Leick and Assadi, p.186, 2022) Indeed, Vinogradov, Leick and Asssadi state that “the level of control that the sharing economy platform” has over the underlying services is “a determining factor for establishing which rules apply to govern the platform” (Vinogradov, Leick and Assadi, p.187, 2022) For Airbnb, the company only needs to comply “with legal requirements in Ireland, its country of establishment” due to only providing an intermediary service (Vinogradov, Leick and Assadi, p.187, 2022)

Another important facet of the legal and regulatory framework of sharing economy are the laws “surrounding the service provider who shares goods or services via the platform with the user” (Vinogradov, Leick and Assadi, p 187,

Some lessons for Vietnam

3.5.1 About policy and legal framework for E-governance

It can be argued that because Vietnam does not have an extensive framework for e-governance development as China, it could not have established such effective e-governance programs However, in recent years, Vietnam has adopted a lot of experiences from other countries as well as promulgated a plethora of policies and regulations for e-governance, as mentioned in Chapter 2 It is the implementation process that is holding e-governance development back in the case of Vietnam, since there are few projects and significantly less funding invested in e-governance. Recently, the Vietnamese government has issued the Decision 942/QD-TTg dated June 15th 2021, approving the strategy for development of e-government towards digital government for 2021-2025, with orientation towards 2030 It is high time for more investments and projects in e-governance to be carried out

Vietnam can certainly learn from China in creating a policy and legal framework for digital government Seeing that China has taken a very prudent approach, Vietnam should also consider its policies and laws carefully so as to make sure they can be applicable, given domestic factors regarding culture, the economy, the country’s history and political contexts Vietnam also needs to speed up the completion of national databases in various fields, forming a common data warehouse connecting and promoting information distribution between state agencies and local authorities for deeper analyses (Tran, 2022)

Another lesson from Vietnam considering the case of e-governance development in China is to focus on improving government services’ quality as well as research and development of new applications in accordance with the people’s needs Vietnam should also come up with new training programs and educational plans to prepare its workforce for digital transformation In addition, it would need to build good infrastructure to be ready to apply new technologies such as big data, cloud computing especially novel security solutions in information security or network security (Tran, 2022).

An addition experience Vietnam can learn from China can be seen in technical standards and performance indicators, which serve as the basis for inspecting, monitoring and evaluating digital transformation results nationwide (Tran, 2022). Vietnam has recent promulgated the Decision No.922/QD-BTTTT approving the Project “Determining a set of indicators to evaluate digital transformation of ministries, ministerial-level agencies, governmental agencies, provinces and cities directly under the central government” The Digital Transformation Index (DTI) will monitor and evaluate objectively the annual digital transformation of governmental agencies, provinces and cities It would include component indexes such as e- Government (EGDI), IT (IDI), network information security (ATM), competitiveness (GCI), innovation (GII) (Tue Minh, 2022) This index would allow the government to identify good practices in the process of digital transformation to replicate nationwide as well as updating the assessment results online for research purposes (Tue Minh, 2022).

Vietnam can draw a lot of lessons from other countries’ experiences with digital taxation From the Chinese experience, it is clear that good security, data sharing facilitation, and electronic commercial law that protects the rights of digital businesses, platforms and customers are all crucial Policies that encourage and enhance these factors/areas would certainly serve as catalysts for the development of new businesses Another lesson that Vietnam can learn from China is putting investments in digital equipment and infrastructure This would accelerate the digitalization process pertaining to e-governance, especially digital taxation

Learning from Australia’s experience, Vietnam can utilize resources from the private sector to fasten its progress in developing digital taxation The Southeast Asian nation can partner with technology companies for implementation of digital taxation, particularly in a time that an increasing number of technology companies view Vietnam as an attractive destination The Australian government also issued a very comprehensive Privacy Act that protects personal data from being misuse. Particularly, government agencies have to publish their studies if the public data they use exceeds 5,000 people Vietnam can incorporate similar terms/conditions into the existing Law on Information Technology No 67/2006/QH11 dated June

29 th , 2006 or the Law on Cybersecurity No 24/2018/QH14 dated June 12 th , 2018

The Korean experience with digital taxation certainly provides new ideas for the Vietnam’s taxation system South Korea had a lot of computer programs for digital taxation along with automatic filling system that reduce time and costs for the tax payers In addition to economic benefits, having such system surely would reduce administrative costs for the government

3.5.3 AI governance and platform economy

To prepare for potential technological disruptions, Vietnam should emulate the European Union's approach to AI regulation by drafting policies and regulations The EU's Ethics Guidelines for trustworthy AI and White Paper on Artificial Intelligence offer valuable guidance for creating a regulatory framework Additionally, Vietnam can draw inspiration from the EU's AI Act and risk-based approach to AI regulation, which will help categorize and manage AI-related activities effectively.

Analyzing the EU’s model, we can see that the AI Act places “different constraints on each category”, making it easier for developers to comply by adhering

“to technical standards that are being formulated by European standards-setting bodies” (O’Shaughnessy and Sheehan, 2023) This raises the importance of technical standards bodies, which would translate “general provisions described in legislation” to “precise requirements for AI systems” (O’Shaughnessy and Sheehan,

2023) Together with national regulators and courts, “technical standards bodies will clarify precisely how the AI Act will apply in different contexts” (O’Shaughnessy and Sheehan, 2023).

With its horizontal, risk-based approach, the AI Act “fix the broad scope of what applications of AI are to be regulated, while allowing domain- and context aware bodies like courts, standards bodies, and developers to determine exact parameters and compliance strategies” (O’Shaughnessy and Sheehan, 2023). Nonetheless, the EU’s broadly horizontal approach “faces several risks that other countries should watch closely” (O’Shaughnessy and Sheehan, 2023) Firstly, different regulators may have varying opinions/capabilities on the same issue, resulting in suboptimal results Secondly, “the standards process has historically been driven by industry”, which would post problems for the government and the public as they would need to have certain degrees of influence to make the regulation effective and just (O’Shaughnessy and Sheehan, 2023).

From these observations, it is clear that a combination of both vertical and horizonal approaches to regulating AI is the best solution While horizontal approaches can “provide predictability to developers and businesses” and “reduce the chance of regulatory gaps”, vertical approaches “have the benefit of being tailored to mitigate the specific harms posed by different AI applications” (O’Shaughnessy and Sheehan, 2023) Truly, a combination of both strategies will eliminate potential downsides For the horizontal approach, the disadvantages would be “a static horizontal regulation” and a dependency on standards setting bodies (O’Shaughnessy and Sheehan, 2023) For the vertical approach, the drawback would be that it “requires a certain level of legislative and interagency coordination to minimize costs for both regulators and businesses” (O’Shaughnessy and Sheehan,

In terms of sharing economy, Vietnam can learn from the EU’s experience and struggle in clearly categorizing platforms into provider of intermediation services or provider of underlying services Since this problem is related to businesses’ compliance and operational costs, Vietnam should devise a clear set of rules on how sharing economy platforms should be categorized and controlled in its territory

CHAPTER 4: CURRENT SITUATION OF THE POLICY AND LEGAL

FRAMEWORK FOR DIGITAL ECONOMY IN VIETNAM

Current situation of the policy and legal framework for digital

4.1.1 General policy and legal framework for digital economy in Vietnam

In order to understand the history and development of digital economy in Vietnam, we need to look at the directions that the Party and the Vietnamese government are heading towards in terms of economic development The country has aimed at developing “Information technology application in economic and social field” since the early 2000s, and has issued many legal documents to serve as the legal framework to “manage and regulate aspects and activities of the digital economy in Vietnam” (Do, 2020) There are several series of guidelines and actions plans play a huge role in setting up the policy and legal framework for digital economy development in Vietnam, including the Resolution No 50/NQ-CP dated April 17 th 2020, Resolution No 52-NQ/TW date September 27 th 2019, Resolution 01/NQ-CP date January 1 st 2020, Decision No 749/QD-TTg date June 30 th 2020, Decision 942/QD-TTg dated June 15 th 2021 and Decision 1726/QD-BTTT dated October 12 th 2020

In addition to the general policy and legal framework for digital economy, one must look into contributing factors to the success of the digital transformation These factors include digital/E-Government, policy and legal framework for e-commerce development, policy and legal framework for electronic transactions, policy and legal framework for non-cash payments, policy and legal framework for sharing economic activities, policy and legal framework for the development of artificial intelligence (AI), policy and legal framework for smart urban development, and policy and legal framework for information safety and cyber security (Do, 2020) I will analyze each of these contributing factors to the success of digital economy in Vietnam and try to point out some pros and cons to the corresponding policy and legal framework In addition, I will study from the experiences/models of developing policy and legal framework from several countries around the globe and devise some recommendations for finding the correct policy and legal framework to hasten the economic digitalization in Vietnam

Lovelock seems to think that Vietnam has gone from a centralized economy to a state-directed mixed economy that has also incorporated digital economy Indeed, according to the recently approved National Digital Transformation Programme by

2025, with an orientation towards 2030, the Vietnamese government aims for the digital economy to contribute 20% of total GDP by 2025, and 30% by 2030 What’s more, Vietnam also aims to “be in the top 50 countries on the UN’s ICT Development Index as early as 2025” (Vietnam Briefing, 2021) Digital transformation in Vietnam focuses in several sectors: finance and banking, healthcare, education, agriculture, transport, logistics, energy, mining and manufacturing

Currently, Vietnam is putting more emphasis in developing e-commerce and smart cities (and perhaps satellite cities) Its e-commerce market is among the fastest growing internet economies in Southeast Asia Statista reported that the total e- commerce market value of Vietnam is 16.4 billion USD in 2022, a very high level compared to only 2.97 billion USD in 2014 The growth of e-commerce has undoubtedly created many jobs and connect local manufacturers and vendors to their business partners overseas For smart cities, “Vietnam has started the gradual development of smart cities that include Hue (2015), Da Nang (July 2016); Ho Chi

Smart cities prioritize regional planning, enabling seamless integration into metropolitan areas This strategy was evident in Vietnam's development of smart cities in Ho Chi Minh City (2016) and Can Tho (2016), fostering connectivity and growth within regional networks.

Comparing to its neighbors in the region, Vietnam’s approach to digital economy planning is quite different, although there are still certain similarities due to comparable economic, education and technological capabilities While governments in countries like Thailand or Malaysia choose to regulate the digital economy with a government leadership approach, focusing on regulating new business models and technologies as well as having concrete roadmaps for a state- led digital economy, Vietnam is opting for a more lenient method: “the state’s primary self-identification as a regulator and “controller” of the economy, coupled with an enterprising and vibrant private sector gives more opportunities to the latter to shape a forward-looking agenda” (Lovelock, 2018, p.40) Almost every country in the region will try to spur more innovation and development of new technologies, they are still significantly held back by low productivity and digital competitiveness. For example, “Vietnam ranks 63rd out of 113 economies in digital environment and support system for entrepreneurs, according to an index developed by the Asian Development Bank (ADB)” (Minh Long, 2022) This may cause the nation to lose out on the potential benefits when it successfully attracts foreign investors due to the inability to produce high-valued manufacturing (and also high-tech ICT) goods

In 2022, the Prime Minister put into effect the Decision No.411/QD-TTg dated March 31 st , approving the national strategy for development of digital economy and digital society through 2025, with orientation towards 2030 This regulation stipulates comprehensive digital transformation, ranging from digital agriculture, digital healthcare, digital education and training to enhanced labor, employment and social security Some basic objectives of this regulation include: increasing the share of digital economy to 20% of GDP; increasing the share of digital economy to at least 10% in each industry or sector; having the share of e-commerce to total retail sales to over 10%; the rate of enterprises using e-contracts is over 80%; the rate of small and medium enterprises using digital platforms is over 50%; the proportion of digital economy workers in the labor force reaches over 2%, basic target by 2030: The proportion of the digital economy will reach 30% of GDP; the proportion of the digital economy in each industry or field shall be at least 20%; The proportion of e- commerce in total retail sales reached over 20%; The rate of enterprises using e- contract platforms reaches 100%; The percentage of small and medium-sized enterprises using digital platforms is over 70%; The percentage of digital economy workers in the labor force is over 3% (National Academy of Public Administration,

There are also ambitious social goals set up in the Decision No.411/QD-TTg, namely having 95% of adults using smart phones by 2030, 95% of the population aged 15 and over having a payment transaction account at a bank or other authorized organization, over 70% of the adult population having a digital signature, over 80% of the people in the working age are trained in basic digital skills, 100% of households are covered with fiber optic broadband Internet (Da Nang’s Department of Planning and Investment) In order to achieve these grand goals, Vietnam needs a comprehensive set of policies that can enhance the country’s education system (in support of digital transformation), build more advanced infrastructure, and invest more into R&D According to Len Mei, “in the digital economy, all economic activities are evolving around data” and that “data centers play a key role in the digital economy” As a result, it is crucial that Vietnam facilitates the construction of new data centers, since many “sophisticated application software, including blockchain, AI, etc.” purely depend on these types of infrastructures (Mei, p.11,

The Vietnamese government is quickly addressing the need for data center in building an e-government and heading towards a digitalized society One example to this notion can found in the Decision 06 by the Prime Minister dated January 06,

2022 on “Approving the Scheme on developing the application of data on population, identification, electronic authentication data for national digital transformation in the 2022-2025 period, with a vision toward 2030” OECD had claimed that the amount of data generated every day in the world is huge, and the publication of data from both the public and private sector would increase 1-2.5% of total global GDP (Trong, 2023) Furthermore, professor Ta Hai Tung from the University of Science and Technology also states that “data access and sharing can generate economic and social benefits directly for data providers, indirectly for data creators and users, and across the economy” (Trong, 2023) The implementation of Decision 06, together with other data center projects, would certainly improve e- governance, create a more transparent, open business environment and drive the economy forward

Decision No 749/QD-TTg dated June 30, 2020 of the Prime Minister approving the National Digital Transformation Program to 2025, with a vision to

2030 strives “to realize the dual goal of developing digital government, digital economy, the digital society, at the same time facilitates the foundations of a number of digital technology enterprises with global competitiveness” (Do, 2020) This Decision stresses the gravity of digital data in this day and age as well as how data have become valuable assets/resources that serve as “prerequisite for digital transformation” (Do, 2020) It also covers another imperative factor in developing the digital economy, which is cyber security The Decision No 749 in 2020 holds that data protection must be carried out at all levels in the digital transformation process (Do, 2020) Several ambitious goals pertaining to this matter formulated in this document are developing e-government so that Vietnam would be in the top 50 countries when it comes to e-governance (EGDI), digital economy accounting for 30% GDP, increasing labor productivity by 8% annually, getting into the top 30 countries using the IDI, GCI, GII indexes or being in the top 30 countries in terms of internet security.

Another more recent policy pertaining to digital economy is the DecisionNo.466/QD-BTTTT that issues an implementation plan for the national strategy for the development of digital economy and digital society by 2025, with orientation towards 2030 This regulation revolves around implementation plans for Ministries and local authorities in order to achieve ambitious digital economy goals such as aiming for high ratios of digital economy factors to GDP, industries, sectors and high digital literacy and competence The Appendix 1 goes into detail on the specific goals for the indicators of digital economy and digital society

In terms of the legal basis for pursuing a strategy of regional economic integration and pursuing a more digitalized economy, there are many Vietnamese laws that regulate activities in the cyberspace Most recently, Vietnam has approved the Cybersecurity Law dated 01 October 2022 and the Decree 13 on personal data protection These laws are the new legal backbones that would both protect consumers as well as ensure that firms have to set up a good compliance program and compete in a fair market Decree 13 will apply to personal data, including political or religious views, health conditions, race, location, bank account information, etc According to this Decree, the Ministry of Public Security and the Ministry of Defense will carry out specific plans to help the government manage, inspect, handle, examine personal data and implement protection plans These Ministries will also be responsible for the research and application of new methods/ mechanism to handle cases related to personal data protection

Another important legal document regulating the digital economy in Vietnam is Resolution No 52/NQ-CP in 2020 This resolution provides a number of guidelines and policies to ministries and local authorities in order to actively participate in the Fourth Industrial Revolution and increase the role of the government in developing crucial infrastructure, human resources, internationalization and industries’ competitiveness The Resolution stresses that the structure and quality of labor are still low comparing to other countries in the region, and technological advancement has not been the main driven force of socio- economic development As a result, there are still a lot of room for increasing the scale of digital economy Some goals set by this resolution are: maintaining the country’s ranking in the GII index, constructing the digital infrastructure that can rival other ASEAN countries, making digital economy accounted for roughly 20% of the country’s GDP, increasing productivity by 7% on average per year, fully integrating e-government into state management, forming several smart cities in key economic zones, aiming at making Vietnam a center for smart manufacturing, services and innovations

Digital economy in Vietnam in recent years and the effectiveness of

Despite challenges from COVID-19, Vietnam's digital economy has grown steadily Businesses transitioned to online platforms and adopted smart technologies, including digital audit, AI, blockchain, and gamification Online shopping has surged, with the number of participants reaching 57-60 million in 2022, representing a significant increase since 2016.

According to the latest statistics, the number of applications and records received on the e-commerce management portal has increased steadily throughout the years For example, the number of business accounts went from 42,976 in 2019, to 52,880 in 2020 and 67,054 in 2021 (IDEA, 2022, p.14) Similarly, the number of personal accounts increased from 14,452 in 2019 to 17,423 in 2020 and 21,779 in

202 (IDEA, 2022, p.14) The number of websites and e-commerce applications confirmed by the Ministry of Industry and Trade went from 1,191 in 2019 to 1,525 in 2020 and slightly went down to 1,448 in 2021 (IDEA, 2022, p.14) This trend in Vietnam is analogous to the digitalization taking place in many other parts of the world and in the region According to the Digital 2022 global overview report from

We are social & Hootsuite, the number of internet user globally has increased from around 2,177 billion people in January 2012 to 4,950 billion people in January 2022, with the average time using the internet per day has increase from 6 hours 09 minutes in Q3/2013 to 6 hours 58 minutes in Q3/2021

Figure 5: Number of Internet users over time

Source: We are social & Hootsuite (2022).

Figure 6: Daily Time Spent Using the Internet

Source: We are social & Hootsuite (2022).

Vietnam has many advantages for digitalization and digital economy development Besides having a young, competent and hard-working labor force, the nation also possesses strong ICT infrastructure, strong demand for high-tech products and consuming/buying on e-commerce websites One example to this notion can be found in the case of quick business growth during the pandemic, when online shopping became popular: “In 2022, Vietnam is the leading country inSoutheast Asia in terms digital economy growth rate” (Ho, 2023) Vietnam’s digital economy grew 28% from 2021 to 2022, compared to 22% in Indonesia, the

Philippines and Singapore, 17% in Thailand or 13% in Malaysia (Ho, 2023) This result is achieved through perseverance in a top-down approach: “As of early May

2022, in Vietnam, all 63 provinces/cities established a Digital Transformation Steering Committee, 55 out of 63 localities issued resolutions on digital transformation and 59 localities issued digital transformation programs/projects or plans for a period of five years” (Vietnam Business Forum of Vietnam Chamber of Commerce and Industry, 2023) Vietnam also has many capable and competent tech companies such as FPT, Viettel, BKAV, MISA, VNPT that are contributing hugely to the digital transformation of the economy For instance, Viettel has successfully developed and deployed 5G technology with locally made equipment:

“Viettel’s engineers developed gNodeB 5G within six months, from June and December 2019 on the basis of the experience it gained from the development eNodeB, the transceiver for 4G and from the pre-feasibility study for 5G” (Vietnamnet Global, 2020) In addition, industries such as biotechnology or semi- conductor is also progressing at great pace Vietnam has set up plans to advance the biotech industry with orientation towards 2030: “The focus will be on light industry, energy and commerce, with an emphasis on strong, green value chains for bio- products and biotech companies” (Vietnamnet Global, 2021)

Amidst geopolitical tensions and global supply chain disruptions, Vietnam has emerged as an attractive destination for foreign investment in the semiconductor industry The strategic location and economic stability of the country have enticed investors seeking to diversify their production and reduce reliance on a single region Samsung's recent announcement of a $920 million investment underscores Vietnam's potential as a hub for semiconductor manufacturing, with production set to commence in 2024.

2021) Similarly, “Intel Corp (INTC.O) is considering a significant increase in its existing $1.5 billion investment in Vietnam to expand its chip testing and packaging plant” in Vietnam (Guarascio and Vu, 2023) This move by Intel is estimated to cost

$1 billion, and certainly the government is advocating for more investments:

“Vietnam is aggressively pushing to expand its chipmaking industry, courting foreign companies in all the three main segments of assembling, testing and packaging; manufacturing with fabs; and designing” (Guarascio and Vu, 2023).

Despite heavy investments and focus on high-tech industries, it is still recommended that Vietnam takes into account the factors that attract FDI to retain its growth. Professor Nguyen Mai, President of the Vietnam Association of Foreign Invested Enterprises (VAFIE), states that “Vietnam should not rest on its gains and we need to make an assessment of the bottlenecks in luring FDI, such as transport infrastructure, and information networks” (Vietnamnet Global, 2023)

Firms in Vietnam have a penchant for investing in technologies Not only does it help them with compliance with new regulations, but it also optimizes operations and maximizes profits: “It is undeniable that digital transformation in businesses has brought many benefits such as: Increased transparency and efficiency in corporate governance, saving costs as well as increasing workers’ productivity, creating better customer experience and increasing revenue” (Nhandan, 2023) One epitome to this notion can be found in the case of Quang Ninh province’s Dong Trieu hi-tech agriculture zone, which “can export 2,000 tons of high-quality agro-products to the market each year” (Vietnamagriculture, 2022) This hi-tech agriculture zone belongs to Masan Group, one of the largest manufacturers of consumer goods (food and beverages) in Vietnam This zone contains polyhouses and greenhouses that use the most modern technologies of Vietnam and Israel, which allow “fully automatic from humidity, nutrition, and temperature” (Vietnamagriculture, 2022) In particular,some notable technologies include “the Kubota cultivation technology (Japan),Netafim drip and sprinkler irrigation technology, TAP (Teshuva AgriculturalProjects) greenhouse production technology, hydroponic growing technology using nutrient film technique (NFT), and Microgreen sprouting technology”(Vietnamagriculture, 2022) WinEco Dong Trieu is also upgrading “management system for planting plots and field diaries using electronic software”, which will enable “staff and employees of the company can control daily production activities through handheld devices” (Vietnamagriculture, 2022) Undoubtedly, this would increase productivity of each farm worker and reduce labor cost as well as management cost for the firm

Another example to this notion can be found in the case of Hanoi-based Thai Binh Duong Co., Ltd, which used to employ 80 workers to manufacture 200 sets of telecom and fiber optic cable products per day (Vietnamnet Global, 2022) Since

2022, this company has bolstered the use of digital and automatic machinery systems and “only needs 10 workers to make 500 sets of products per day, paying a daily labor cost of only 4 million VND” (Vietnamnet Global, 2022).

Technological advancements have fueled productivity optimization for the government and private sector Digital transformation also prioritizes environmental protection and circular economy initiatives Vietnam is fostering circular economy development in industrial parks and transitioning to eco-industrial parks The nation aims for 563 industrial parks in 61/63 provinces and cities, with 397 established and 292 operational This includes 106 parks under construction with a total land area of 35,700 hectares.

RECOMMENDATION AND CONCLUSION

Recommendation for Vietnam

The digital economy is being considered as one of the most important growth drivers for Vietnam in the next five decades to turn our country into a developed country The document of the XIII Congress has determined, by 2025 econometrics accounts for about 20% of GDP (currently this proportion accounts for about 10%), by 2030 econometrics will account for about 30% of GDP To achieve this goal, the digital economy must grow 3-4 times faster than GDP growth Therefore, strongly promoting the national digital transformation, developing the digital economy and digital society to create a breakthrough in improving the productivity, quality, efficiency and competitiveness of the economy is a must

As the chapter 2 of this study has mentioned, there are plenty of different aspects to devising a complete policy and legal framework for the digital economy. They are: e-government and digital government, e-commerce, electronic transactions and non-cash payments, sharing economy, artificial intelligence, smart urban development, information safety and cyber security as well as many others. Nonetheless, constructing a policy and legal framework for digitalization is an extremely complicated task that no countries in the world has managed to do Some of the most successful digital economy policies and regulations have only been restricted within certain areas, such as in e-governance in China or AI in theEuropean Union As a result, it is necessary that Vietnam learn quickly from these readily available successes and incorporate them into its current policy and legal framework During this process, it is important to understand fully the current situation of digitalization in Vietnam, including the current policy and legal framework for digital economy so that the recommended policies and regulations would be realistic and applicable Hence, chapter 2 and chapter 4 provides the necessary theoretical background and overview of the existing conditions for our studies of the policy and legal framework for digital economy

The development of Vietnam's digital economy faces challenges related to state management and policy implementation The legal and institutional framework remains incomplete, particularly in regulating digital business activities The lack of legal tools and monitoring systems for digital and cross-border platforms hinders effective oversight Additionally, policies and laws need to adapt to accommodate new business models and services emerging in the digital economy.

When it comes to e-governance, Vietnam needs to promote a strong leadership, improve enforcement efficiency and accountability This can be achieved through raising awareness of both civil servants and citizens through e-Government counseling and support centers This would require authorities at all levels to cooperate and carry out implementation plans at the government level (Hoang,

2022) In addition, the government can also “rearrange and mobilize financial as well as human resources” to facilitate the development of e-government programs. Surely, in order to attract more talents to participate in e-Government construction and development, it is necessary to have a financial mechanism to build and hire IT products and services (Hoang, 2022) It is also high time for the Vietnamese government to speed up the adoption of new technologies in e-governance through

“prioritizing the development of Vietnamese ICT industry government policy and reform, and promoting the take-up of smart technologies across all industries” (FIA,

2018) Surely, it is crucial to devise new education plans to build technological skills for Vietnamese workers

In order to improve the quality of government service for the people, the state has formulated and promulgated a number of legal documents and policies, namely the Decree No 73/2019/ND-CP in 2019 on management of investment in IT application using state budget capital, the Decision No 942/QD-TTg approving the e-government development strategy towards the digital government in the 2021-

2015 period, with a vision to 2030, Decision No 749/QD-TTg introducing program for national digital transformation by 2025 with orientation towards 2030 or Decision 411/QD-TTg approving the national strategy for development of digital economy and digital society by 2025, orientation towards 2030 Not only will the development of e-government in Vietnam would increase living standards, increase the government’s efficiency and decrease administrative costs, it would also bring about more integration and economic development In the future, when e- Government is completed, it would be necessary for the Vietnamese government to also pursue a stronger IT system, high levels of online public services and high level of information security (Hoang, 2022)

For digital taxation, Vietnam can certainly should come up with regulations to promote the participation of the private sector in providing information technology infrastructure for the implementation of e-tax services (Nguyen and Mac, 2017) In addition, Vietnam must be able to ensure information security for tax payers so that it can build trust and move towards a more advanced system of information security management that complies with international standards (Nguyen and Mac, 2017) It would also be beneficial for businesses as well as the average person if Vietnam devises plan to survey the level of satisfaction when people use e-tax services (Nguyen and Mac, 2017) With these types of surveys, Vietnam can “get the necessary feedback to improve and upgrade service quality, build a positive attitude of taxpayers towards the application of e-tax” Another possible recommendation forVietnam is to innovate the way of applying and implementing electronic tax inVietnam with promotion and incentive policies such as extending tax declaration,reducing the penalty for late submission of tax when using electronic tax return.Because Vietnam has yet to introduce an official digital taxation law, the country can benefit from building similar models or putting tax sandboxes into practice by learning from the experiences of South Korea and Australia For example, Vietnam can cooperate with local technology companies (Viettel or FPT) to build digital taxation administration system similar to the South Korea’s NTIS, or carry out tax avoidance prevention programs comparable to those conducted in Australia

Vietnam should prioritize AI research and development, establishing support centers and research institutes IT infrastructure, especially data storage, should be expanded to support AI advancements Regulations, standards, and processes for AI's technological, information security, and data privacy are crucial policy considerations The government should encourage domestic AI adoption and study successful global deployment models to tailor local policies Emulating the EU's AI regulation efforts, Vietnam should focus on personal data protection laws and limiting high-risk AI activities to ensure consumer protection and ethical AI development.

With respect to the sharing economy in Vietnam, considering the rapid, incessant rise of super apps such as Grab, Gojek or Momo as well as P2B platforms (Vaymuon.vn, Validus Capital, etc.), the government should promptly devise new

“regulations for market entry”, which can be permits and licenses (Pham, 2022).Learning from the experience of the EU, it is crucial that Vietnamese policy makers make clear the relationship between the service providers, the platforms and the customers Furthermore, Vietnamese regulators need to stipulate “the contractual relationship for the sharing economic model”, namely to “determine the threshold level for economic dependence” of the entities (for example: taxi drivers) in the sharing economy on the technology-based enterprise (Pham, 2022) The government must determine “the signing of an employment contract”, set general principles and delegate the making of specific regulations to lower bodies in localities (Pham,

2022) Consumers’ data protection should also be paid much attention to in a sharing economic model, as Vietnam “must strike a balance between enabling innovation in the sharing economy and protecting personal data” (Pham, 2022).

Conclusion

The digital economy is increasingly asserting itself as a trend and a new driver of global growth In Vietnam, the digital economy will be one of the key factors driving the country's economic growth in the coming years The improvement of the policy and legal framework for the development of the digital economy must be clearly recognized.

As mentioned in Chapter 1 as well as throughout this paper, the development of main pillars of the digital economy is a key to facilitate the transformation in businesses Firstly, the government needs to focus on basic infrastructure, which in this particular case revolves around developing electric power industry In addition, policies aiming at the development of the digital infrastructure are also pivotal to the success of the digital economy (5G infrastructures, fiber-optic cables, data centers). Next, the government needs policies that can facilitate the advancement of digital platforms for digital society as well as e-commerce development Along with these regulations, data protection laws and cyber security mechanism need to be cultivated in order to ensure the rights and benefits of consumers, firms

In order to achieve these purposes, Vietnam can learn from models that have been tested and proven in other countries The development of e-government has been strategized and carried out in China for quite a long time Considering many similarities in historical, geographical and cultural factors, it is certainly suitable forVietnam to research and apply the e-governance development strategy from China.Likewise, taxation regulations of the digital economy can be studied and adopted from the Chinese model Within Asia and Pacific, Vietnam can learn from SouthKorean model of digitalization of the tax administration as well Amending e- government policies and tax administration policies with experiences from China and South Korea will make the policy and legal framework for digital economy more robust and encourage more foreign investments Vietnam can also draw some experiences regulating AI and the sharing economy from the ideologies, policy and legal framework on this matter from the European Union

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