Quarterly adjusting desired revenue target

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Director of Import and Export Duty Department, Mr. Luu Manh Tuong

Talking with Customs Newspaper’s reporter, Director of Import and Export Duty Department, Mr. Luu Manh Tuong analyzed the Customs sectors’ action program in the management of state budget collection.

Could you tell me about the detail of great changes by Directive 723/CT-TCHQ on the state budget revenue of the Customs sector in 2019 compared to the previous years?

The Customs sector performs the State budget collection task in 2019 in the context of continuing to deeply cut tariff rates under FTAs. Particularly, CPTTP took effect from 14 January 2019, which will greatly impact on the Customs sector’s budget revenue.

Petroleum products in the beginning of 2019 fell sharply in both quantity and price, because Nghi Son refinery and petrochemical plant was put into operation and provided products to market. Thus, the amount of imported petroleum product sharply reduced (the price of imported petroleum product is estimated at US$ 65/ barrel, in the first months of 2019 was about US$ 50/barrel- said by the reporter). At the same time, the tax incentive policy applicable to imported automobile components for domestic assembly and production continues to be implemented.

Facing the difficulties affecting the state budget collection in 2019, the General Department of Vietnam Customs issued Directive 723/CT-TCHQ dated 30 January 2019, on synchronous implementation of solutions for trade facilitation and anti-revenue losses in implementing this task. This directive differs from the directives on state budget collection in previous years, which is to synchronously implement solutions on all areas of customs operation, from development of policy, inspection and supervision and building of contingent cadres and civil servants.

Directive 723/CT-TCHQ not only provides revenue solutions in the field of tax administration, but also provides the action plan of the whole sector, focusing on solutions to facilitate and prevent the state budget revenue losses. The Directive specifies 5 general tasks for the entire Customs sector and 9 specific tasks assigned to each unit under the Customs sector.

Accordingly, units of the General Department of Vietnam Customs shall be in charge of advising on the policy development and guidance in the fields, including: Customs and tax procedures, risk management, anti-smuggling, and training in all operational activities.

The municipal and provincial customs departments shall be in charge of performing State budget collection task. On the basis of the task groups of units under the General Department of Vietnam Customs, these departments must also deploy these task groups to obtain two goals that are the facilitation for import and export activities, and promotion of trade development. These are factors to compensate for the factors that reduce the state budget revenue in 2019.

In parallel with the above solutions, the Customs sector has also continuously implemented the previous effective collection solutions, that is to continue to strengthen the management, prevention of revenue loss and commercial fraud. In which, it will classify enterprises for targeted inspection, and classify goods with high risk on price, code and C/O in applying tariff preferential agreements, to ensure fight against commercial fraud but also does not affect import and export activities of compliant enterprises.

One of the solutions to prevent the revenue loss implemented by the Customs is the supervision of the declaration of price and code of import and export goods. Could you tell me about the implementation of this solution?

In 2019, the Customs sector will strengthen management, in which focusing on high-risk subjects. Specifically, the General Department of Vietnam Customs will update and issue a list of risk management on values and the list of risk management on classification and application of tax rates. At the same time, when discovering errors and frauds, the Customs authorities will also put into risk management criteria to classify goods and check right at the customs clearance stage to prevent fraud.

This prevention is implemented by the Customs authorities to not cause troubles and difficulties for compliant enterprises, and only focus on subjects with high risks in declaration on value, HS code and the application of preferential tariffs.

In addition, the Import and Export Duty Department will strengthen inspection on the information technology system and coordinate with the unit on duty on the online surveillance system of the General Department of Vietnam Customs to request Customs Departments to inspect shipments with suspicious signs, thereby, targeting subjects and prevent the rampant inspection, affecting import and export activities.

In addition to the revenue collection solutions specified in Directive 723, as the management and administration department of Customs sectors’ revenues, how does the Import and Export Duty Department support provincial and municipal custom departments in performing this task, Sir?

In addition to drawing up the action plan and state budget collection solutions, Directive 723/CT-TCHQ also assigns revenue targets to each local customs department on the principle of not assigning the average target to each customs department increasing by 5% compared to the estimated target of VND 300, 500 billion, it will base on the actual revenue in 2018 and the assigned target to assign desired target. Thus, some customs departments will be assigned a low desired target and some customs departments will be assigned a high desired target, because the ordinance targets for departments were developed in August 2018, at that time, the total revenues of departments was not fully appreciated.

The Import and Export Duty Department will regularly monitor the increase and decrease in revenues of municipal and provincial Customs Departments, thereby focusing on analyzing and finding out the cause and advising the General Department of Vietnam Customs’ leaders to adjust the quarterly desired targets so that Customs departments could accomplish their ordinance targets and additional targets, to prevent the situation that high assigned targets makes customs departments focus on attracting revenues and loose management.

Thank you, Sir!