Nghi Son Refinery Project behind schedule, Thanh Hoa Customs’ revenue sharply reduced

	Collecting 200 billion VND from the first crude oil shipment of Nghi Son Refinery and Petrochemical Complex Project
	Thanh Hoa Customs Department: State revenue collection will be easier thanks to Prime Minister's Decision

Customs officers of Thanh Hoa Customs inspect imported and exported goods. Photo: H.V

Not as calculation

According to the analysis of Thanh Hoa Customs Department, the main reason for the sharp decrease in revenue compared to the initial target is the fluctuation of the Nghi Son Refinery Project. In 2017, Thanh Hoa Customs Department is assigned by the Ministry of Finance and the GDVC to collect the revenue of 4,200 billion VND from import and export activities. In which, the estimated tax revenue from crude oil imports of Nghi Son refinery project is 3,390 billion VND. The calculation is based on the forecast that the Nghi Son Refinery project will complete the commissioning and start-up activities and commence the commercial operations in the fourth quarter of 2017, with the estimated production of 1.38 million tons.

In fact, as of the end of November 2017, Nghi Son Refinery and Petrochemical Limited Liability Company (NSRP) -the project investor has completed 97% of the workload of for the pilot operation. However, the NSRP is overcoming technical errors. With these errors, the NSRP has not reached the progress for operation under the plan. The time of completion and preliminary transferring will be delayed and transferred to the second quarter in 2018 (about 11 months behind schedule compared to the initial plan and about 6 months slower than the adjusted plan of 31st December 2017). Thereby, Thanh Hoa Customs Department said that the estimate on the revenue of 3,390 billion VND from crude oil exports was not feasible.

Many revenues reduced

In parallel with the sharp decline in revenue from the Nghi Son Refinery Project, many other revenue sources from other projects in the area under the Department’s management also declined. According to Thanh Hoa Customs Department, in the past years, the revenues of the Department is mainly VAT from the imports of machinery and equipment of projects investing in Nghi Son Economic Zone. Currently, the projects have been basically completed and put into production, so not much machinery and equipment will be imported, while the new projects have not been yet deployed leading to the unstable revenues. For example, the State revenues in the period of construction of Nghi Son Refinery and Petrochemical Complex Plant in 2014 was VND 433.9 billion VND, accounting for 57% of the total revenue of the Department; in 2015 was 962 billion VND, accounting for 66.8% of the total revenue; in 2016 was 333 billion VND, accounting for 32% of the total revenue; in the first 11 months of 2017 was 1,010 billion VND, accounting for 58% of the total revenue. Thanh Hoa Customs said that according to information from NSRP from now to 31st December, 2017, the Company will not import crude oil, affecting to the accomplishment of revenue collection task of the Department.

In addition, the revenues from the import of other large companies such as automobile parts imported by Vietnam Engine and Agricultural Machinery Corporation (Veam), machinery and equipment imported by Vissai Cement Joint Stock Company, Kieu Phat Co., Ltd in the remaining months of 2017 sharply decreased. For example, in September 2017, these companies paid the tax amount of 291 billion VND, and in October paid the tax amount of 142 billion VND. As of the end of 27th November 2017, the revenues paid by these companies was over 45 billion VND. On the other hand, the above companies no longer import the automobile parts, they only mainly processed for Thanh Cong Automobile Group, and other import and export items are very limited.

As of 27th November, the revenue of the Thanh Hoa Customs Department was 1,735 billion VND, reaching 41% of the assigned budget. For the actual situation of businesses in the province, Thanh Hoa Customs Department expects that its revenue contributing to the State budget in 2017 is about 1,800 billion VND, reaching 42.8% of the ordinance target, equivalent to 174.7% compared to the revenue of 2016 (1,800 billion VND/ 1,030 billion VND). Thanh Hoa Customs Department also proposed the General Department of Vietnam Customs to consider reducing the estimate of State revenue of the Department.