Ho Chi Minh Customs suffer difficulties in revenue collection

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Customs officers of Ho Chi Minh City Customs Department inspect imported goods at Cat Lai Port. Photo: T.H

Turnover of a series of items plunged

Nguyen Quoc Toan, Deputy Head of Import-Export Duty Division under the Ho Chi Minh Customs Department, said after more than four months, import and export turnover increased to the same period in 2019, but decreased slightly in May, especially import turnover fell 3.2% compared to 2019, leading to asharp decrease in State revenue. In which, import commodity groups thathadtheir turnover decreased compared to 2019, are groups with high tax rate, so it has a direct impact on the department’s revenue.

Import turnover of petroleum products sharply decreased to US$583.11 million, down 52.4% compared to 2019. Means of transport and spare parts reached $228.26 million, down 51.5% compared to 2019; Car less than nine seats only reached $245.88 million, down 29.5% compared to 2019; iron and steel reached $757.11 million, down 26.7%.

In addition, commodities with increased import turnover have a low tax rate (most of them have import tax rate of 0% due to the implementation of FTAs), so increased taxes (mainly VAT) can not compensate for reduced taxes.

Total import turnover of goods across Ho Chi Minh seaport in May was $23,126.34 million, only reaching 96.8% compared to 2019 (in the first four months of 2020 import turnover increased more than 4% to 4.5%) compared to 2019. This shows a sign ofglobal economic crisis.

This fact impactedHo Chi Minh City Customs’ department. In May, the department’s revenue only reached VND 7,721.55 billion, downby 32.4% compared to May in 2019. As of the end of May 31, the department’s actual revenue was VND 39,991.45 billion, 34.8% of the estimates of VND 115,000 billion, downby 18.5% compared to 2019.

Must collect VND 500 billion per day

According to Ho Chi Minh City Customs Department’s estimate since the beginning of the year, to fulfill the estimate of VND 115,000 billion, Ho Chi Minh City Customs Department estimated the department must collect VND 9,590 billion. However, due to the outbreak of the coronavirus, from February to now, Ho Chi Minh City Customs Department only collected VND 8,073 billion per month, downnearly VND 1,500 billion per month.

According to Ho Chi Minh Customs Department, with revenue in the first five months of the year, the department must collect VND 10,400 billion in the lastseven months of the year and collect VND 500 billion per working day.

In the last six months of the year, revenue may increase because the Government andthe People's Committee of Ho Chi Minh City havestarted to take action programmes and plans for economic recovery but it will be difficult. Agood signal is the group of raw materials and supplies still grows stably, contributing to creation of finished products for export and stabilising the domestic market. Particularly, turnover of commodity group with high tax rate such as alcohol, beer, cosmetics, consumer goods, iron and steel, nine-seat cars andflying fuel will likely continue to decrease.

Facing the above challenges, revenue collection of Ho Chi Minh City Customs Department will be more difficult. The department is implementing solutions to support the business community to increase exports and imports according to plans with commitments "Innovating to break through, accompanying to create maximum trade facilitation to the business community, collecting right and sufficient revenue to increase the State budget revenue”.

HCM City Customs Department estimated that the State budget revenue in June 2020 will increase compared to May, reaching VND 8,100 billion. At the same time, the department must maintain this collection rate and higher to fulfill the target of VND 115,000 billion in 2020.