Preventing revenue loss effectively from work of price and tax code

A consultation session with import-export enterprises, shipping lines, port enterprises about importing scrap at Cai Mep Port. Photo: Nguyễn Huế

Deploying many solutions

To complete the task of State revenue collection assigned by the National Assembly and the Government in 2020, the Customs sector determined that besides creating the most favourable conditions for enterprises' activities, the re-determination of codes and goods value, C/O was an important solution in the fight against loss of State revenue.

From the early days of the year, the General Department of Vietnam Customs has promoted the fight against loss of revenue by redefining codes, valuation and C/O. In particular, the General Department of Vietnam Customs has directed to strengthen inspections of customs valuation of goods.

In the first four months of the year, the whole sector increased revenue collection through price consultations and reached about VND 176 billion, focusing on goods items such as wine, bicycles, plows, cultivators, hand tools, inner tubes and tires.

In tandem with price consultations, the General Department of Vietnam Customs also developed a list of Vietnam's import and export goods issued together with Circular 65/2017/TT-BTC dated June 27, 2017, in compliance with HS Nomenclature, ASEAN Harmonised Tariff Nomenclature 2 (AHTN 2), developed a list of import and export goods at risk of goods classification and tax rates. In particular, there was a focus on revising, updating and specifying classification criteria for easily-mixed and difficult-to-classify goods to avoid fraud in declaring and determining import and export commodity codes; focus on controlling the use of C/O to apply tax rates in the Special Preferential Import Tariffs to prevent declaration of goods that are not subject to enjoying preferential tariffs but still apply the C/O to enjoy low preferential tax rates.

The General Department of Vietnam Customs also builds a centralised management database to look up and unify in classifying. Regularly reviewing codes and tax rates declared by enterprises based on centralised management data to detect cases of fraud in declaring codes and tax rates, fix and collect tax fully in accordance with regulations.

Drastically preventing loss of revenue

The Covid-19 pandemic has created many difficulties and challenges for the Customs sector in revenue collection.

Therefore, the General Department of Vietnam Customs requested Customs Departments of provinces and cities to continue reforming and simplifying administrative procedures in the customs field, promoting customs modernisation and applying IT in the fields: management, supervision and management of import and export goods, collecting import and export taxes and reform of administrative procedures to facilitate businesses. Strengthening post-clearance audit, specialised inspection, of that focusing on items with great value, high tax rates, imported goods of enterprises from questionable markets; goods declared as discounted, prices declared lower than databases, goods declared with special preferential tax rates and declaration of eligibility for tax exemption or refund; goods declaring incorrectly type then request liquidation for tax refund.

To be more drastic in the implementation of solutions for preventing loss of revenue, on April 19, the General Department of Vietnam Customs approved a pilot project of one-time consultation, using results of consultation many times. This project aimed at trade facilitation in inspection, consultation and determination of customs valuation for enterprises that have a high level of law compliance, a good sense of cooperation and engage with Customs authorities; improve responsibility of customs officials in inspection, consulting, determining customs valuation and encourage the compliance of enterprises in customs valuation declaration and cooperation with the customs authorities.