Preventing tax fraud from export scrap

	Tens tonns of copper scrap is “under the cloak” of export aluminum
	More than 500 scrap containers sent back in first six months
	500 containers of unqualified scrap removed from Vietnamese territory

Nearly hundred tonnes of smuggled aluminum were discovered by Customs at Cat Lai port. Photo: T.H.

Prosecute many cases

On September 18, 2019, the Customs Enforcement Unit - Ho Chi Minh City Customs Department completed the dossier and transferred it to Ho Chi Minh City Customs Department to consider prosecuting the export of tax evasion scrap of La Ebi Lohas Co., Ltd. ( Binh Chanh - Ho Chi Minh City). This enterprise opening a declaration at Binh Phuoc Customs said the export of more than 18 tonnes of copper and aluminum scrap was valued at more than VND 310 million and the payable tax amount was in excess of VND 55 million. When the goods were gathered at Transimex Saigon - Thu Duc Port in Ho Chi Minh City for export, the Customs Control Team coordinated with the Saigon Port Area 4 Customs Branch to check the container to discover that the company declared the wrong weight and names of goods for tax fraud. Actual export goods include 30 tonnes of VND, worth more than 1 billion VND, frauds of hundreds of millions of VND in taxes.

On September 13, HCMC Customs Department issued a decision to prosecute a criminal case related to the illegal export of over 27 tonnes of copper scrap of La Ebi Lohas One Member Co., Ltd. The case was also checked and discovered in April 2019 by the Customs Control Team in coordination with the Saigon Port Area 1 Customs Branch.

Like the above shipment, La Ebi Lohas One Member Co., Ltd. opening export customs declaration at Chon Thanh Customs Department - Binh Phuoc Customs Department declared export of over 25 tonnes of scrap aluminum ingot (form chips, obtained during the production process). The shipment was exported through Cat Lai port in Ho Chi Minh City. When the goods were transported to the export border gate, the Customs Control Team coordinated with the Saigon port area 1 Customs Branch to stop bringing goods through the supervision area and conduct physical inspection. Find out the goods are not "scrap aluminum ingot" but "copper scrap (copper - nickel - zinc alloy)". This item has a unit price of US US$3.33 / kg, nearly 10 times higher than the unit price of aluminum scrap, which has a fraud of over VND 403 million and a tax fraud of some VND 400 million.

Set up a plan to stop scrap

La Ebi Lohas One-member Co., Ltd. was established at the end of 2018 in Binh Chanh - Ho Chi Minh City. The main business is inland aquaculture, but the also company sells spare parts and supporting parts of cars and other motor vehicles; wholesale solid, liquid, gas fuels and other related products. Once established, the company illegally exported many batches of scrap with tricks to evade taxes.

Related to exported scrap, the Southern Region Anti-smuggling Control Team (Team 3) - Anti-Smuggling Investigation Department (General Department of Customs) is coordinating with Saigon Port Border Gate Customs Branch zone 1 to complete the case, criminalizes the illegal export of five containers of scrap under the form of ceramic products for tax fraud.

The case carried out by Duc Minh Import Export and Development Co., Ltd. (No. 297, Phuc Diem Street, Xuan Phuong Ward, Nam Tu Liem District, Hanoi), was discovered at Cat Lai Port in Ho Chi Minh City in August 2019. This enterprise opening a customs declaration said that export goods were terracotta products. The export tax of the shipment is zero. Searching the consignment, the Customs discovered that the above 5 containers were scrap aluminum, and the export tax rate was 25 percent. The estimated amount of tax fraud is hundreds of millions.

The information of exported scrap with tax fraud, the Customs Enforcement Team has made plan of CK119 specialised project in coordination with border customs sub-departments to conduct inspection and supervision. Many questionable lots have shifted the flow of inspection, finding out that the enterprise evaded hundreds of millions of dong of tax per shipment. According to the leaders of the Customs Enforcement Team, some businesses have taken advantage of the risk management mechanism, intentionally making false declarations of goods names, categories, volumes, values, codes of goods, tax rates, with the purpose of hiding the names of actually exported goods, tax evasion or tax fraud.

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A number of enterprises are based in Ho Chi Minh City, exports at Ho Chi Minh City port, but open customs declarations at other local Customs to mislead their violations. In addition to cases discovered as mentioned above, the HCMC Customs Department continues to expand the project to carry out the struggle, clarifying many cases showing signs of violations.