Reasons for plunge in the Customs’ revenue

	Cao Bang Customs earns over VND546 billion in revenue
	Quang Binh Customs Department's revenue rises 22 per cent

In the first eight months on the year, the revenue from iron and steel products decrease by VND4,100 billion. In the photo: Officers of Vung Ang Customs Branch inspect imported steels at Son Duong Port.

Main impact factors

According to the Import and Export Duty Department under the General Department of Vietnam Customs has reported notable contents of import and export activities in the first eight months of the year. The taxable import turnover decreased by 19.1% to US$79.5 billion, meeting 53% of the estimate; the taxable export turnover dropped 22.7% to US$4.7 billion year-on-year, meeting 57.5% of the estimate.

In addition, the turnover of many commodity groups plunged. The taxable import turnover of raw materials, machinery, equipment, and spare parts for production such as: coal, chemicals and chemical products, plastics, iron and steel and scrap, textile and garment raw materials, electronic components, auto components that account for 56% of total taxable import turnover, fell 23.7% year-on-year.

The taxable import turnover of petroleum products grew 27.4% in volume to 5.8 million tons but dropped 1.9% in value to US$4.7 billion compared with the same period in the previous year.

The taxable import turnover of CBU cars declined 9.9% in volume to 86,585 cars and 9.6% in value to US$2 billion compared with the previous year. Although the quantity and value dropped, the revenue of the product group increased due to the import of many cars with high import tax rates.

The department’s representative said that the decrease in the revenue resulted from the plunge in the taxable import turnover. The statistics showed that the revenue in the first eight months of the year declined bout VND29,500 billion. The revenue from imported iron and steel saw the sharpest decrease of VND4,100 billion; from imported petroleum products dropped VND6,100 billion; plastic raw materials fell VND2,500 billion.

In the first four months of the year, importers carried out procedures for 13,529 imported CBU cars on average per month. However, between May to August only 8,117 cars were imported per month, a decrease by 40%/month and VND1,100 billion This is one of the reasons for the gradual decline in the revenue from April.

The sharp decline in two-way trade turnover has had a significant impact on revenue collection. As of August 31, the revenue of the entire Customs sector dropped 19.2% year-on-year to VND240,390 billion, accounting for 56.6% of the estimate. The revenue in August alone rose 0.54% to VND27,771 billion compared with the previous month.

The representative said that the revenue tended to plunge from May. The revenue in January reached VND27,064 billion, VND30,731 in February, VND34,479 billion in March, VND32,053 billion in April, VND29,956 billion in May, VND 30,711 billion in June, VND27,624 billion in July, and VND27,771 billion in August. In recent two months (2021 an 2022) the revenue in the second half of the year also dropped compared with the first half.

The average revenue per month will decrease by VND1,415 billion due to the reduction in VAT revenue as per Decree 44/2023/ND-CP. The revenue will decline about VND3,500 billion due to the tax refund for automobile components under Decree 26/2023/NĐ-CP in the last months of the year, and the refund for petroleum products under C/O and import refund for on-spot import and export goods

Implementing solutions comprehensively

Facing difficulties and challenges, to achieve the revenue target, the General Department of Vietnam Customs (GDVC) requires the whole Customs units to implement solutions comprehensively. The units need to promote administrative reform in a simple, transparent and unified manner, and in accordance with international standards on customs, further facilitate import, export, and transit of goods and means of transport. Expand the signing of e-tax payment with commercial banks under the 24/7 tax payment scheme and execute the pre-authorised tax payment programme.

Drastically implement solutions to increase the revenue under Directive No. 479/CT-TCHQ of the GDVC’s Director General. Improve the efficiency of tax administration for import and export goods. Apply international standards and modern customs management processes to facilitate the business community while still ensuring strict customs supervision and control. Expedite the anti-revenue loss through customs inspection, supervision, tax administration, post-clearance audit, specialized inspection, and internal inspection. Promote the fight against smuggling and trade fraud; review, classify, recover and handle tax debt arising before January 1, 2023; and inspect to avoid incurring new debt in 2023.

Review, classify, recover and handle tax debts arising before January 1, 2023 under four groups: Bad debt group; pending debt group; frozen debt group; recoverable debt group. Apply appropriate solutions for each debt group in accordance with regulations issued together with GDVC’s Decision No. 2317/QD-TCHQ dated October 24, 2022.

The country’s top customs regulator requests border gate customs units to strengthen solutions to control quantity, category, product name, and value of import and export goods; review, assess risks and inspect the tax exemption, reduction, refund, non-tax collection, non-taxable for export processing and production enterprises... Effectively apply IT systems to shorten the time for processing dossiers of tax collection, tax exemption, reduction, refund, non-tax collection, and handling of taxes, late payment interest, and overpayment fines.

The whole Customs sector should focus on reviewing and analyzing business information on the Customs information system to serve risk assessment, business compliance assessment and application of customs inspection and supervision measures. At the same time, review dossiers, focusing on high-risk subjects, targeting routes and goods; flexibly apply risk control measures to prevent, detect, and strictly control high-risk subjects and facilitate well compliant enterprises.