Lao Cai Customs Department makes great effort for revenue collection in the last months of the year

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Customs officers of Lao Cai International Border Gate inspect imported fruits. Photo: T.B

Turnover decreased, revenues increased

In 2019, Lao Cai Customs Department was assigned a revenue target of VND 2,060 billion by the Ministry of Finance, a target of VND 2,160 billion by the General Department of Vietnam Customs and a target of VND 2,370 billion by the People's Committee of Lao Cai province.

A representative of Lao Cai Customs Department said that to complete this important political task, from the beginning of the year, the department built a plan, assigned revenue targets, tasks of revenue collection, tax debt management to its units and each customs officer. Lao Cai Customs Department also promoted programmes of administrative procedure reform and customs modernisation to facilitate import and export activities.

By the end of September, the whole Department collected VND 1,614 billion, equivalent to 78.3 percent of the target assigned by the Ministry of Finance, 74.7 percent of the target assigned by the General Department of Customs, 68.1 percent of the target assigned by People's Committee of Lao Cai province, up 7.3 percent compared to 2018.

Notably, the revenue collection by Lao Cai Customs Department achieved positive progress and growth compared to 2018 in the context that import-export turnover decreased compared to the same period last year.

Specifically, in the first nine months of 2019, the total number of enterprises participating in import and export at Lao Cai Customs Department was 429, an increase of 16 enterprises compared to 2018. Total turnover reached $1,450 billion, equal to 85.8 percent compared to 2018. Of which, export turnover reached $925 million, equivalent to 92.9 percent compared to 2018; import turnover reached $525 million, equivalent to 75.7 percent compared to 2018. Major exported products are: Agricultural products, iron ore, yellow phosphorus. The major imported products are: Fertilisers, chemicals, coal, electricity, machinery and equipment.

The significant revenue of Lao Cai Customs is due to the sharp increase in turnover and revenue from the major exported products compared to 2018. By the end of September, the export tax revenue at the department reached nearly VND 808 billion, up 83 percent compared to 2018. While revenue from other sources reduced such as import tax revenue reached more than VND 121 billion, equivalent to 61 percent compared to 2018, from value added tax was nearly VND 494.6 billion, equivalent to 89 percent; safeguard tax was nearly VND 189.7 billion, equivalent to 62 percent, and other revenues were VND 885 million, equivalent to 67 percent.

The collection structure of Lao Cai Customs Department in the first months of the year is different from many other departments in the whole Customs sector. The major revenue of most local customs departments comes from import tax, but the revenue of Lao Cai Customs Department come from export tax, accounting for 50 percent. On the other hand, high growth in export tax revenue not only offset the deficit from other revenues but also significantly raised total revenue of the department compared to 2018.

Many challenges

The revenue collection in the first quarters was significant compared to the target and the same period in 2018. However, Lao Cai Customs Department said that in the fourth quarter, the department’s revenue collection has faced many challenges. Notably, China has strengthened management policies on import and export goods and closely controlled sub-border gates and border crossings, affecting import and export activities via the province. In addition, the output products of some enterprises in Lao Cai have faced difficulties with low production and export value.

In recent years, iron ore exports have accounted for a large proportion of export turnover in the export commodities and are the major revenues of the department. However, the Government’s policy does not encourage the export of mineral materials to ensure supply of raw materials for domestic steel refining factories that have been put into stable operation, leading to a significant reduction in the revenue from iron ore products at Lao Cai Customs Department in the coming time.

In addition, imported fertiliser revenue dropped sharply because supply from domestic fertiliser factories was put into stable operation, and the output met the demand of the agriculture sector. Moreover, some import fertiliser enterprises have shift into temporary import for re-export to supply to foreign markets, leading to a decrease in the Lao Cao Customs department’ revenue.

Currently, many key investment projects in Lao Cai Province have stably operated. Thus, demand for imported equipment and machinery for investment projects in Lao Cai province sharply decreased, so turnover fell, leading to the sharp decrease in the revenue of this key commodity group.

To accomplish revenue collection in 2019, Lao Cai Customs Department has focused on implementing solutions to create the best conditions for businesses engaged in import and export across border gates, to promote the attraction of import and export enterprises, especially enterprises operating in Lao Cai but they are implementing customs declaration outside the province.

Promote administrative reform, simplify tax procedures and create favourable conditions for organisations and individuals to invest in production and business, enhance competitiveness and promote to increase State budget. Focus on improving the efficiency of e-tax collection 24/7 and implementing the pre-authorised e-tax payment programme.

For measures to prevent revenue loss, Lao Cai Customs Department leaders requested their units perform well the task of recovering outstanding debts, fighting against delay in paying taxes, bad debts, irrecoverable tax debt; and actively coordinate with agencies such as Tax, Department of Planning and Investment, Bank and Treasury to collect outstanding tax debts.

Strengthen post-clearance audit, specialised inspection, especially focus on inspection for targeted commodities, the green channel declarations and observance of law of businesses with high risk on tax.

Request and deploy effectively guiding documents on anti-smuggling of the Government, the Ministry of Finance, the General Department of Vietnam Customs, the Steering Committee of 389 at levels and the People's Committee of Lao Cai province. Strengthen forces to manage effectively customs control area, apply specialised measures to actively prevent, seize and strictly handle smuggling, trade frauds and illcit cross-border transportation of goods and other Customs offences.