Needing works to manage cross-border e-commerce

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Professional activities at Express Customs Sub-Department (Hanoi Customs Department). Photo: N.Linh

Lack of understanding of commodity policies

According to the Hanoi Customs Department, the struggle against fraud in e-commerce is facing many difficulties. Because there is lack of current regulations on customs procedures for exported and imported goods through e-commerce transactions. The implementation of customs procedures like as ordinary goods takes a lot of time, has not taken full advantage of the e-commerce utilities for verification on valuation, HS codes, origin and commodity policies.

For taxable value, buyers often buy at the discount or buy a large number of quantity at preferential prices (information is shown fully on the website including the original price and the discounted price, preferential price when buying a large number of quantity), in addition to the price of the website, the buyer must pay other fees such as shipping costs, service charges for buyers. In the documents on customs value, there has not had provision on this case, so the Customs authorities still check the customs value, verify the taxable value according to the current regulations like ordinary shipments, causing difficulties, even lack of information leads to the determination of the taxable value not being suitable with the actual payment value, affecting tax collection for the State budget.

Meanwhile, policies on specialised management also do not distinguish between e-commerce and traditional commerce. Most imported goods through e-commerce transactions are carried out directly by individuals, in many cases, the quantity of purchased goods is low and the value is not high (including many items required license or specialised inspection such as: books, stories, powdered milk, functional foods, cosmetics, electronics).

According to the Hanoi Customs Department, there is no regulation on whether an individual purchases for business purposes or for personal consumption to apply specialised management.

Meanwhile, imported goods through e-commerce are very diverse and plentiful, individual buyers are often not knowledgeable about commodity policies, ordering goods without knowing whether goods are banned from importation in Vietnam, the goods are subject to specialised inspection, how customs procedures are carried out...Although most buyers authorize postal businesses, express delivery firms carry out the procedures from licensing, specialised inspection, customs procedures, but due to many small, low-value shipments, it is tough to get licenses, specialised inspection.

“The application of procedures like normal commercial goods has great cost, extend clearance time, even in cases of refusing to receive goods to get back to sellers because goods are banned from importing or not getting specialized inspection ...or declare into other goods; declare low value of goods for avoiding specialised inspection and evading taxes affecting the State budget revenue," Hanoi Customs Department said.

The risk of dividing shipments for avoiding tax

This is an issue shared by many experts at the seminar "Customs management of e-commerce activities" chaired by Customs News, in collaboration with the Office of National Steering Committee 389 last week.

Nguyen Danh Nghia - Deputy Director of Express Customs Sub-Department (Hanoi Customs Department) said that there was a risk that customs declarants may abuse the regulations on tax exemption for small value goods to divide the shipment, declare low value to avoid tax and it was difficult to identify the abuse or violations of "minimum value".

In addition, if the customs declarant is an organisation or individual who does not have a tax code and does not do customs procedures regularly, the risk assessment and analysis will face difficulties due to lack of information and no profile of buyer/seller. Customs declarants do not carry out customs procedures regularly, do not know about goods classification, HS codes, valuation determination and regulations on ban on export/import, specialised management. Meanwhile, the application of the criteria of channel verification for declaration on the automatic system is relatively dependent on the HS codes and management text codes declared by customs declarants.

In terms of goods being declared by express delivery enterprises, although express delivery enterprises have inspected and screened information on goods (description of goods and value, origin) from the customers before carrying out procedures, the information is mainly provided by the shipper and the accuracy depends on the honesty of the senders, so taking advantage of false claims to reduce or evade taxes is inevitable.

Facing this fact, to create favourable conditions for the Customs offices in State management in general and especially in controlling and preventing loss of tax for import and export goods through e-commerce transactions, as well as supporting and creating favourable conditions for individuals and organisations engaged in goods import and export activities through e-commerce, Hanoi Customs Department stated thatit was necessary to issue quickly a decree and circular on e-commerce management for export and import goods. In which, it was necessary to stipulate the contents related to customs procedures, tax policies, commodity management policies, rights and obligations, responsibilities of involved parties; focus on researching and clarifying the payable charges when exporting or importing goods through e-commerce transactions, stipulate the additions and deductions...as a basis for determining the taxable value; stipulate the form of payment, the payment must be made via a bank to have a basis for checking and accepting the transactions value via e-commerce.

On the other hand, it is necessary to build a software system to ensure the management of e-commerce transactions when e-commerce transactions start to form. Thus, Customs would have information earlier to serve information analysis and risk assessment before goods arrived in Vietnam, effectively preventing violations that might occur when goods arrived in Vietnam, and carry out customs clearance of goods quickly. Designing a functional system that allows Customs authorities to check order information, check payments on websites providing e-commerce services, e-commerce websites selling goods in foreign countries.

Regarding tax exemption regulations for import-export goods via e-commerce transactions, there must be some specific provisions in the Law on Import-Export Taxes and guiding documents to avoid the risk that customs declarants misuse regulations on tax exemption for small valuation goods to intentionally divide into many low-value orders to evade taxes.

In addition, Customs authorities must strengthen the work of customs inspection and supervision, enhance the collection and analysis of information from various sources to assess risks during the process of carrying out customs procedures, to detect cases of wrong declaration of goods quantities, wrong declaration of goods names, wrong declaration of customs values, use of invalid documents to carry out customs procedures…, ensuring control and combat loss of tax for import and export goods through e-commerce transactions.