Customs revenues strongly influenced by the change of import market

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The press conference. Photo: T.Trang.

The press conference was held under the leadership of the Director of the Import-Export Duty Department, Mr. Luu Manh Tuong with the attendance of more than 50 reporters from many newspapers and media agencies.

Regarding the State budget revenues of Customs, the Deputy Director of the Import-Export Duty Department, Mr. Le Manh Hung said that in 2016, Customs was assigned to collect 270,000 billion vnd by the National Assembly, the Government and the Ministry of Finance. The accomplishment of this revenue target is a significant challenge for Customs.

According to Mr. Le Manh Hung, the estimate of economic growth in 2016 was built on the macroeconomic indicators with GDP growth of 6.7% and export growth of 10%. However, the actual GDP growth in 2016 was only about 6% and export has only increased by 7%, which has shown that the manufacture and business activities have not meet the Government’s expectations, putting a big impact on Customs revenues.

Specifically, the first 10-month import turnover of 2016 increased by 6%. Theoretically, without other impacts, in the first 10 months of 2016, Customs revenues should have increased by 6%. However, in the first 10 months of 2016, Customs revenues only increased by 2.8% over the same period of 2015. On the other hand, the import turnover of shipments with C/O in 2015 accounted for 21.19% of total import turnover. In the first 9 months of 2016, the import turnover of shipments with C/O accounted for 23.03% of total import turnover, an increase of nearly 2%. Thus, we can see that due to deep reduction of tax, enterprises have changed to import goods from markets with a lower import tax rate.

In addition, the Law on import duty and export duty also affects State budget revenues, such as the provisions on extending the time of tax payment; and materials for export products to be exempted from tax. Especially, the signing of free trade agreements has had a huge impact on the State budget revenues of the Customs. For example: the petroleum imported from Korea increased from 2% to 10% in volume, while the tax for petroleum is reduced from 20% to 10%, which has a strong impact on Customs revenues.

With such influences on State budget revenues, Customs has still increased over the same period, with Customs revenues in the first 11 months of 2016 reaching 239,454 billion vnd, equivalent to 88.7% of the estimate, an increase of 2.9% compared to the same period of 2015 (232,683 billion vnd). This result derives from a series of measures implemented by Customs at the beginning of the year, which focuses on facilitation of trade, post-clearance audits, anti-smuggling and anti-commercial fraud.

At the press conference, most questions from media agencies covered surveillance and management of imported cars in the form of gifts and donations; collection of tax arrears from automotive enterprises; tax assessment at Customs post-clearance audits; and the impact of the transfer of import flows on Customs revenues.

In response to a question from a reporter around the inspection of tax collection of imported automobiles where Tan Thanh Do Company was applied a tax assessment of 720 billion vnd. Mr. Luu Manh Tuong said, for imported cars, Customs officers had frequently carried out inspection of car valuation, especially suspected cases for declared valuation. For imported cars in the form of gifts and donations, due to no contract, Customs authorities will apply the declared price and implement tax assessment. The Ministry of Finance is still conducting the inspection, so the results have not been disclosed.

For the case of Tan Thanh Do Company, Customs authorities have also performed inspections and tax assessment. The company has submitted its complaints and Customs authorities are still dealing with the complaints.

Regarding questions from reporters about the rate of imports and exports and the rate of State budget revenues, the Director of the Import-Export Duty Department, Mr. Luu Manh Tuong said Customs revenues were lower because petroleum and crude oil with a great revenue fell in price. Specifically, Customs revenues from imported petroleum and crude oil decreased due to the application of the Vietnam – Korea Agreement (tax reduced from 20 to 10% for petroleum and crude oil). Accordingly, domestic enterprises have imported petroleum from Korea 7 times as much as before, which has made Customs revenues decrease by nearly 5 trillion vnd. Besides, there are many other factors, including enterprises imported cars from ASEAN with a lower tax rate or domestic enterprises imported coal through the trade agreements with Australia and Indonesia with a tax rate of 0% instead of 10% as other markets.

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In response to the question about the impact of Circular 20/2011 / TT-BCT of the Ministry of Industry and Trade on the tax collection of Customs authorities, Mr. Luu Manh Tuong said that Circular 20 only provided conditions for the import of automobiles, so Customs revenues are not affected by this Circular.