Ho Chi Minh City Customs: prevent bad debts arising from PCA

	Ho Chi Minh City Customs supports businesses to comply with customs laws
	Ho Chi Minh City Customs handles many large drug operations
	HCM City Customs answered many problems about export processing and export production of cashew

Post-Clearance Audit Customs Branch

Revenue doubles

After two years of repercussions from COVID-19, enterprises have been facing difficulties in production and business, partly affecting the Post-Clearance Audit (PCA) of Ho Chi Minh City Customs Department.

However, by applying many new measures, the PCA of Ho Chi Minh City Customs Department achieved high results, collecting nearly VND70 billion to the State Budget, recording a year-on-year double increase.

The above results of the Ho Chi Minh City Customs Department have a great contribution from Post-Clearance Audit Custom Branch. As of October 31, 2022, the branch made more than 700 proposals for information collection and advised the Ho Chi Minh City Customs Department to issue 294 decisions on PCA. Accordingly, 213 of 294 audits were conducted with a total amount of tax arrears and payment to the state budget of nearly VND62 billion, reaching 88% of the assigned target (VND70 billion), exceeding 50% year-on-year.

Notably, the branch has carried out a thematic inspection for export processing and production and imposed a large tax on many violating enterprises and collected tens of billions of dong. At the end of October 2022, the branch finished the inspection for F. Co., Ltd., and discovered that this company did not properly declare, manage and use imported raw materials and accessories for export processing.

The branch has imposed over VND1.4 billion of tax. Previously, through the PCA, the branch discovered that two companies importing cashew products used the goods subject to tax exemption for the wrong purposes and did not comply with the management of imported materials for export production, so the branch imposed nearly VND12 billion of tax.

In addition to thematic inspections, the branch requested working teams to review the number of import and export types with suspicious signs to carry out PCA. With this approach, the branch discovered a number of cases of imports with incorrect codes and tax rates, specifically, in October 2022, a working group also inspected and imposed more than VND621million of tax on goods for K. Pharmaceutical JSC for incorrect declaration of tax code for raw materials for the production of medicines; a company importing "electrolyte powder for hemodialysis" misrepresented the goods code, tax rate, and was imposed VND 3.88 billion of tax; a company importing goods and products for outsourcing at an export processing enterprise but failed to declare and pay import tax when importing them into the domestic market, so the company was imposed over VND 2.3 billion of tax.

Preventing bad debts arising

Although the PCA work faced many difficulties amid the post-pandemic recovery period, the bright spot in the PCA work of the Ho Chi Minh City Customs Department is that the enterprises are “convinced and voluntarily obedient” in tax payment to the State budget and bad debts did not arise.

According to the PCA Customs Branch, most of the taxes arising from the PCA work have been paid to the state budget. For example, in the case of tax arrears of more than VND12 billion of a cashew nut importer, the customs indicated mistakes of the company, so the company paid tax immediately for the state budget.

However, there is still a large amount of tax debt from many years ago because tax debtors have been no longer operating or they are under the complaint process. According to the branch, as of June 30, 2022, the amount of tax debt, late payment interest and fines totaled over VND 885 billion. Most of the debts arose many years ago. Currently, about 80 enterprises have bad debts after PCA work.

Of which, the longest debt amount (arising from 2004) is over VND92 million of Phuc Quang Trading Service Co., Ltd; more than VND3.6 billion of Viet Duong Production Trading Co., Ltd.; and many large debts of enterprises are complaining and taking lawsuits to court, such as a debt of nearly VND700 billion of an automobile enterprise arising from 2016; and a debt of more than VND26 billion of a refinery and petrochemical company.

In order to urge and recover debts, the PCA Customs Branch has sent many documents to the People’s Committees of localities to verify the status of operations of enterprises; and worked with tax authorities; the Department of Planning and investment; the Traffic Police Department; Land registration office; and over 70 banks to collect debts but the results are not as expected.

Quang Ninh Customs Department: targeted post-clearance audit

Since most of the tax debts belong to businesses that have ceased operations but closed their tax code, or businesses have fled; the Customs Branch is rarely supported by local authorities and has to wait for a very long time to receive responses from local authorities.