Discover enterprises in fraud of raw materials in processing and export production

	Dong Nai Customs: Prevent many trade frauds in processing and export production
	Increase over 800 billion vnd in budget collection from post clearance audit
	Customs duty policy in Vietnam are flexible

The number of enterprises operating in the field of processing and manufacturing has increased rapidly.

Processing and export production enterprises increase rapidly

In recent years, the number of enterprises operating in the field of processing and manufacturing has increased rapidly. In 2014, Vietnam had about 4,600 enterprises in this field, but by the end of 2017, this number increased to 8,200 units.

Processing and export production enterprises in textile, footwear, electronics, furniture, and mechanics are mainly in 11 provinces and cities such as Binh Duong, Dong Nai, Tay Ninh, Long An, Ho Chi Minh City, Hanoi, Hai Phong, Ha Nam, Hung Yen, Hai Duong, and Bac Ninh.

In order to create favorable conditions for the investment environment of enterprises in general and in the field of processing and production in particular, Vietnam has promulgated many preferential tax policies and procedures to attract investment.

Specifically, the Customs Law and its guiding documents have reduced many Customs procedures for this field. The Law on Import and Export Tax in 2016 introduces the tax exemption for raw materials and materials imported to the export market and the management of processed goods instead of 275-day tax grace as before.

The above-mentioned preferential policies created a favorable environment for enterprises to process, expand production scale, increase export turnover of the country and provide more jobs.

However, besides the enterprises that have observed the Law well, through the Customs post-clearance audits, the Customs discovered that some processing enterprises took advantage of the simple policies and tax incentives for fraud.

The violations of enterprises on the management and use of goods mainly focus on raw materials and materials imported in the form of processing and production, which is a violation of norms.

The "typical" sign of norm violation

According to the experience and actual inspections of the Customs Department of post-clearance audits (the General Department of Vietnam Customs), violations of the processing and export production enterprises which are related to the current norms are enterprises which can not determine the actual production norms, using "temporary norms" after the termination of the processing contract. This is the main reason leading to the determination of surplus raw materials and supplies after finishing the processing contract. The amount of raw materials is not suitable with the reality.

Other causes leading to the determination of raw materials and supplies which are not suitable with the reality areas enterprises declare uniformly the wastage percentage for the raw materials and supplies when declaring the liquidation / contractual documents without using actual loss in the production process.

In addition, the parts of the company have not had a close connection, resulting in the status of inconsistent data among parts according to the actual data.

According to the Customs, in order to ensure efficiency in the work of Customs post-clearance audits in processing and production; and promptly detect enterprises which have committed acts of coping with fraudulent raw materials and supplies for domestic consumption or liquidity with tax refunds not suitable to production reality; there should be new methods of checking the norms for approval of accounting book and actual production to assess the legal compliance of enterprises.

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