Customs sector: A difficult year in revenue collection

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In 2020, despite the impact of Covid-19 pandemic, the Customs sector still strives to collect the highest revenue target. In the photo: Customs operation at Hon Gai Border Gate ( Quang Ninh Customs Department). Photo: Tuan Anh.

Overlapping difficulties

In 2020, despite the disastrous impacts of the Covid-19 pandemic, import-export activities will still record positive results. According to preliminary statistics, from the beginning of the year to December 15, the total import and export value of goods reached US$515.27 billion, an increase of 4.5% year-on-year. Of which, the export value was estimated at US$267.22 billion, an increase of6.1% and import value reached US$248.04 billion.

Director of Import and Export Duty Department Le Nhu Quynh: The Customs sector sets the goal of completing the revenue collection task for 2021-2025. In terms of sustainable revenue development, the Customs sector has built tax policies for import and export goods in accordance with commitments in international treaties to which Vietnam is a member, meetingthe socio-economic development requirements of Vietnam in each period. In addition, it has also strengthened the effective identification and management formajor taxpayers. At the same time, reserchingtax collection measures for newly arising goods in international trade. Tostabilize the exploitation of revenue sources, in the future, the Customs sector sets a goal of synchronously implementing solutions of management, inspection, supervision and control for import and export activities. Paying attention to the sufficient and accurate revenue collection in customs operation and tax operation. Municipal and provincial customs departments need to direct their customs branches to ensure the accurate revenue collection and comply with the customs law. Departments under the GDVC need to control the synchronous implementation of Customs policies and regulations in the entiresector. Along with that, to perform tax collection and exemption, reduction and refund. Because withaccurate and effective tax exemption, reduction and refund is also the solution to ensure the sufficient and accurate revenues for the State budget. Regarding tax administration, the Customs sector will also strengthen and focus on the strong application of scientific and technological achievements, especially information technology, proactively work and cooperate with agencies and organizations involved in tax administration activities. Motivated by the synchronous implementation of the solutions, I believe that the Customs sector will accompany businesses, and effectively work with agencies, departments and branches to implement solutions to fulfill the State revenue collection for 2021-2025.

This shows that each year, the customs sector's revenue collection faces different difficulties. In 2020, although the Covid-19 pandemic has a massive impact on all aspects of theeconomy, making the State revenue collection face difficulties, the scale of the State budget revenue for 2016-2020 still increased 1.3 times compared to the 2011-2015 period.

Particularly, in the last fiveyears (2015-2019), the customs revenuehas exceeded the target, the revenue of the following year was higher than the previous year, and the revenue for the whole period reached a record of VND348,711 billion. In 2020, due to the Covid-19 pandemic, the Customs sector still strives to gain the highest revenue of VND315,000 billion, reaching 93.2% of the estimate.

This result shows that the revenue collection of the Customs sector was hit hard by the Covid-19 pandemic. Because when the pandemic broke out, to ensure effective pandemic prevention, many border gates had to suspend their operations. The customs clearance and other activities of businesses were delayed. Many orders of businesses were canceled and even many businesses went bankrupt. Of course, the Customs revenue collection is the most heavilyaffected area.

In addition, when the pandemic broke out, the consumer demand of the people was limited, leading to a decrease in the volume of goods, especially imported CBU cars, so revenue collection has suffered difficulties. At the time of estimation development, the price of crude oil was US$60/barrel, however, the current price of crude oil has dropped to US$40/barrel,which has directly reduced the value of import and export goods, and indirectly decreased the State revenue; the completion of some big power projects has led to areduction in revenue from imported machinery, equipment and components.

On the other hand, the State revenue collection also faces tariff reductions under Free Trade Agreements (FTAs). In 2020, the import tax rates of goods continues to deeply decrease, especially goods with large turnover, high tax rates and large proportion of revenue.

Under the EVFTA, the import duties on nearly 100% of tariff lines and taxable import and export turnover of the two sides will be eliminated after the short roadmap, leading to adeep decrease in the import and export revenue.

Accompany businesses to overcome difficulties and effectively perform revenue collection

In 2020, the Customs sector was assigned an estimate of VND338,000 billion, but it is difficult to achieve the target due to the Covid-19 pandemic. Accordingly, from the beginning of the year, the GDVC’s Director General Nguyen Van Can issued Directive 1040/CT-TCHQrequiring local customs units to strive to complete the State revenue collection in 2020. Effectively perform Decision 924/QD-TCHQ dated March 27, 2020,assigning tax debt collection target to municipal and provincial customs departments, and monitor, collect and handle tax debts each month and each quarter.

The overall solution conducted by the Customs is to drastically implement support to help businessesrestore production and business, thereby increasing State budget revenue.

In addition, along with favorable measures to combat revenue loss, the Customs sector also focuses on reviewing revenue collection and tax debt administration. It proactively reviews, inspects and detects violations in goods classification, determination of value or origin of goods.

Accordingly it collects tax arrears; strengthens tax administration, anti-trade fraud on price, HS code and C/O,tax exemption, reduction and refund, inspection, post clearance audit, investigation on smuggling for enterprises importing and exporting goods with high tax rates and high value, goods imported by enterprises from suspicious markets; goods declaredwith special preferential tax rates, goods declared subject to tax exemption, tax refundto check, promptly detect violations, and collect tax arrears for the State budget.

The whole customs sector strictly and drastically performs anti-smuggling, trade fraud and origin fraud measures.

It also focuses on preventing revenue loss and post clearance audit, preventing new tax debts arising. The entire Customs sector is promoting the settlement of tax debts that are no longer taxable according to Resolution No. 94/2019/QH14 of the National Assembly, submitting them to competent authorities, People's Committees andthe Ministry of Finance to freeze debts and write off tax debts, ensuring strict compliance with the regulations.