Enterprises only spend 10 – 30 minutes to complete all customs declaration procedures

HCM City Customs officials inspected imported raw materials. Photo: T.H

Actual working time with Customs officials is only from 15 to 30 minutes

According to the report on the Administrative procedure compliance cost index (APCI 2020) of the Advisory Council for Administrative Procedure Reform of the Prime Minister, the proportion of time for the group of administrative procedures related to cross-border trade transactions only accounts for 7% of total compliance costs, the remaining 93% are direct costs that businesses have to spend.

Administrative procedures related to cross-border trade transactions are one of the three groups of administrative procedures with the shortest execution time among the nine groups of administrative procedures in the survey, with the average number of working hours each enterprise has to spend 7.3 hours.

On average, the time for all enterprises to implement administrative procedures on customs by themselves and procedures related to logistics which participated in the survey, the time they spent searching for information is 1.3 hours per procedure.

However, only 62% of enterprises spend time on this step, the rest are usually familiar with administrative procedures or have used consulting services to perform procedures.

The actual time to learn about a customs procedure is about 2.8 hours and these businesses said that for customs procedures, firms often seek information through legal documents (62%), forms and processes posted on the internet and 35% of enterprises find out information directly at the local customs authority.

Regarding time for preparing and lodging dossiers of customs procedures, it recorded a rate of 2.4 hours (lower than the average time used for preparing documents for other procedures).

According to the report, this result is because enterprises are proficient in using customs declaration software and usually it only takes 10-30 minutes to complete all the declaration procedures and they always have the necessary documents available as required by the law in advance. Long or short preparation time depends on the complexity and volume of goods.

Customs clearance time of goods at the border gate takes an average of 2.2 hours according to the survey data. According to firms, the actual working time with Customs officials is only about 15-30 minutes, the rest is mainly traveling time, waiting and implementing procedures with logistics services to pick up goods.

Statistics on cargo clearance time by applying channel classification

Regarding direct costs, administrative procedures relating to cross-border trade transactions have high direct costs among surveyed groups of administrative procedures.

In particular, the cost of logistics services accounts for a large proportion compared to the cost of conducting customs procedures. Logistics service costs include lifting charges, lowering charges, infrastructure fees, weighing fees, tolls, parking fees, freight charges, loading and unloading goods depending on the volume of goods and location for conducting clearance.

Some 7% of businesses participating in the survey said that there was an unofficial fee, usually arising in the stage of specialised certification, checking documents and working at ports and border gates.

One of the trends for implementing administrative procedures related to cross-border trade transactions is that more and more businesses are using professional intermediaries (customs brokers) to carry out import - export procedures, especially businesses with low import and export frequency and foreign-invested companies.

Comparison of compliance costs of cross-border trade transaction procedures.

Cost increases due to impact of many parties

However, in general, indexes of the time and direct costs of the administrative procedure group related to cross-border trade transactions in APCI 2020 all increased compared to similar indexes in 2019 is 8% and 44% respectively.

Therefore, at a press conference to announce the assessment report on administrative procedure compliance cost index 2020 (APCI 2020) on March 17, it was suggested the increase in these costs was due to customs procedures not being properly reformed.

Explaining the above problem, according to Dam Manh Hieu, Deputy Chief of the Office of the General Department of Vietnam Customs, the reason for the increase in costs is mainly due to rising costs of logistics because transport infrastructure, yards and the application of science and technology had not been able to keep pace with the increase in volume of import and export goods, the transport infrastructure system was not synchronous, connectivity was limited, and a lack of logistics centres at national level and international level at key economic regions to act as distribution hubs for goods.

Hieu said that over the years, the Customs authority has made efforts to reform, modernise and reform administrative procedures to reduce time and costs and facilitate enterprises. The Ministry of Finance has worked on the development of a scheme for specialised inspection reform in the direction that the Customs is the focal point for specialised inspection at border gates (except for items related to security, national defence and quarantine).

According to the Vietnam Chamber of Commerce and Industry (VCCI), if the scheme was implemented, the time for firms to come to competent authorities for inspection would be reduced at least two days for a shipment.

"However, the problem of the scheme is the need for coordination and delimitation of the scope, tasks and powers between the Customs authority and the inspection organisations of the ministries and sectors," Hieu stated.

Agreeing with this point of view, Minister and Chairman of the Government Office Mai Tien Dung said that the Customs authority has done a great job in cutting cargo clearance time. Vietnam has about 12 million import and export dossiers but Customs had cut it from 62 hours to 56 hours for import dossiers and from 58 hours to 55 hours for export dossiers. The Customs authority also implemented electronic customs procedures, so firms did not have to bring documents directly to the Customs authority, reducing direct contact with Customs officials to cut unofficial costs.

“The guiding spirit of the Prime Minister was to move from pre-inspection to post-clearance audit, but if the post clearance audit is not done well, the businesses are more worried than pre-inspection. So the Customs authority must implement very carefully this issue, the post clearance audit must be transparent and clear, creating favourable conditions for businesses,” Minister Mai Tien Dung said.

In addition, from the results of the survey and the APCI 2020 report, it is recommended that the customs declaration software system, the tax information system and the electronic clearance system (TQĐT-V5), the national single window system need to be be completed and updated continuously... to optimise electronic systems to reduce pressure on papers, dossiers, hard documents; improve the quality of consulting services, support business and give detailed instructions to solve problems in a timely and effective manner; review and reduce transportation costs; promote the application of online payment in collection of related service charges and fees to reduce the time of implementing procedures.