Tricks of tax fraud from false declaration of export goods incur

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Rhino horns in a shipment in transit via airway seized by Customs. Photo: T.H

According to Truong Van Ba, Director of HCM City Market Surveillance Department, in 2020, competent agencies of HCM City handled 25,538 violations, down 45.39% year-on-year. The total State revenue was VND 5,765 billion.

Notably, in 2020, the competent agencies prosecuted 113 criminal cases.

According to Steering Committee 389 of HCM City, the number of inspection cases decreased due to the impact of the Covid-19 pandemic, but the inspection and supervision have been conducted at targeted areas such as warehouses, yards and sites for storing smuggled goods with large volume and high value, contributing to enhancing the efficiency of prevention of smuggling, trade fraud and counterfeit goods in HCM City.

According to HCM City Police, recently, there have beensome complicated tricks of smuggling and trade fraud for tax evasion.

For example, smugglers took advantage of risk management system (the automated system for goods classification into Green, Yellow and Red channels) to make a false declaration of name, category and HS code of export goods for tax evasion.

Notably, some enterprises were exporting e-chips withthe price of each e-chip afew million to several tens of million VND, but they declared up to US$1-2 million to fraudulently refund tax. The smugglers printed the codes different from the normal codes to make it difficult for the specialised agency to trace.

The case of Thu Duc House Joint Stock Company (huduc House) that collected hundreds of billions VND of tax refund by HCM City Tax Department, is also related to export electronic product shipments.

According to the inspectorate conclusion from HCM City Tax Department, from January to June 2019, Thuduc House benefitted to the tune of more than VND 221 billion of tax revenue. Thus, the department issued a decision to collect VND 221 billion of VAT refund and VND 37 billion of tax late payment interest.

In addition, HCM City Tax Department has retrieved the tax assessment period 2017 and 2018 and issued a decision to collect VND 109.8 billion of VAT refund and some VND 27 billion of tax late payment interest. Total revenue from VAT refund and late payment interest is VND 396.5 billion.

HCM City Tax Department said the revenue only includesrevenue from tax refund and late payment interest. The increasing of tax refund of Thuduc House violated Article 200 of the Penal Code, HCM City Tax Department has not temporarily sanctioned administrative violations and transferred the case to the criminal procedure agency for handling.

According to HCM City Steering Committee 389, the fight against tax fraud from online activities faces many difficulties. Along with the development of society, smugglers, manufacturers and traders of counterfeit goods are increasingly using sophisticated and complextricks with modern means, causing many difficulties for inspection and handling.

For example, creating accounts using fake information to sell goods on social networking sites or online applications on internet platforms is now very common, so it is difficult to identify the violators and places storing infringing goods for inspection and handling when the information on website orsocial networking sites isfake.