Hai Phong Customs decreases in revenue collection of nearly VND 4,500 billion

Sketched by T.Bình

In the latest report evaluating results of revenue collection of the unit in the first four months, revenue collection of Hai Phong Customs Department was only VND 18,411 billion, down to VND 4,446 billion from the same period last year (the first four months of 2019 reached VND 22,874 billion).

The above results only reached 27.5% of the current appropriation which was VND 67,000 billion and 25.9% of the target set by the General Department of Vietnam Customs (VND 71,000 billion).

Remarkably, even after the first four months of the year, there were two groups of products that contributed large revenue collection in Hai Phong Customs that suffered a deficit of revenue up to thousand billions VND compared to the same period in 2019, namely CPU cars and machinery and equipment. Specifically, revenue collected from CBU cars was only VND 3,492 billion, down to VND 3,310 billion, equivalent to 47.3%; machinery and equipment hit VND 4,334 billion, down to VND 1,255 billion, a decrease of 22.5%.

Besides that, other commodity groups also decreased from a few dozen to hundreds of billion, such as gasoline reached VND 546 billion, down VND 108 billion; iron and steel reached VND 1,751 billion, down VND 82 billion; beer and wine reached VND 100 billion, down VND 68 billion.

According to Hai Phong Customs Department, although overall turnover has grown by 3.5% (reaching $24,354 billion), the turnover of goods with tax decreased by 13.3% (only $5.31 billion).

To reach the target of VND 67,000 billion, in the last seven months of 2020, Hai Phong Customs Department will have to collect VND 48,587 billion, an average of VND 6,941 billion/month. However, it is very difficult to collect when it is nearly 51% higher than the average of the first four months.

In a recent report to the General Department of Vietnam Customs, Hai Phong Customs Department admitted they could not reach the estimated revenue of the whole year. From the result of the first four months, the Department estimated the revenue of the whole year would only reach VND 57,900 billion (down 9,100 billion compared to the estimate). This means that in the last seven months of the year, it is estimated VND 39,489 billion will be collected, an average of VND 5,641 billion/month.

According to Hai Phong Customs Department, the situation of Covid-19 pandemic in the US and Europe is still complex, many countries have narrowed production and import-export activities due to a reduction of demand for goods. On the other hand, although social distancing measures are easing in accordance with the roadmap, import and export activities have not recovered to the levels of 2019, so it affects items such as machinery, equipment, cars, gasoline and consumer goods. These are the groups that contribute the most to revenue collection.

Along with that, in 2019, big projects in Hai Phong such as Vinfast automobile manufacturing complex in Dinh Vu Cat Hai Economic Zone completed import of machinery and equipment with the amount of value added tax of about VND 3,000 billion. From the beginning of the year to the middle of May, Hai Phong Customs Department has not issued a list of tax exemptions for goods creating fixed assets for any project.

Another difficulty in reducing revenue is due to handling of overpaid tax for automobile manufacturing and assembling enterprises that applies the preferential tariff programme as stipulated in the Decree 122/2016/ND-CP amending and supplementing in Decree 125/2017/ND-CP.

Another noteworthy point is related to tax structure. The assigned target of Hai Phong city in 2020 was VND 57,100 billion (Hai Phong Customs Department also performs State management of customs in Hai Duong, Hung Yen and Thai Binh). In particular, value added tax was VND 31,250 billion, accounting for 55%; other taxes like export-import duty, special consumption tax and environmental protection tax were VND 25,850 billion, accounting for 45%.

However, in the first four months, the revenue collected from Hai Phong only hit VND 16,109 billion, 28.2% of the current appropriation, collected from value added tax was only VND 10,605 billion, equal to 34% of the target; revenue collected from other taxes was VND 5,504 billion, 21.3%.

Facing reality and the estimations mentioned above, Hai Phong Customs Department has proposed the General Department of Vietnam Customs propose the Ministry of Finance adjust the unit's revenue collection targets in 2020.