Scrutinizing taxable price, HCM City Customs raises nearly VND 100 billion

Saigon port area 1 Customs officers inspect imported goods. Photo: T.H

Low-value goods also have their prices slashed

In early May 2024, a business filed an import declaration for a shipment of pharmaceuticals, including feminine hygiene products from Finland. On the customs declaration, the business declared a taxable value of US$0.76 per box (12 bottles) for the 200ml product and US$1.49 per box for the 500ml product. After reviewing the business's import documents and referencing relevant price data for these products, officials from the Import Cargo Customs Procedures Team at Saigon port area 1 customs branch discovered that the declared taxable value was significantly undervalued.

Saigon port area 1 customs branch invited the cargo owner for a price consultation. Based on analyzed data and specific evidence, customs authorities rejected the business's declared value and adjusted the taxable value for both products. The price for the 200ml product increased from US$0.76/box to US$11.8/box (a 15.5-fold increase), while the price for the 500ml product increased from US$1.49/box to US$29.52/box (nearly a 20-fold increase). With this adjusted price, the customs duty for this shipment increased by nearly VND950 million.

Similarly, when receiving an import declaration for a shipment of Secano Reserva De Familia red wine from Chile, the Import Cargo Customs Procedures Teamfound that the business declared a taxable value of only US$1.5 per bottle. After a price consultation, customs authorities had sufficient grounds to reject the business's declared value and adjusted the taxable value to US$8.45 per bottle, resulting in an additional tax revenue of over VND876 million.

As a unit handling a large number of import declarations, averaging 800-1,000 declarations per day for various consumer goods, Saigon port area 1 customs branch paid particular attention to the taxable values declared by businesses. The branch’s leader has directed the price consultation division to thoroughly review import documents and use reference prices provided by the General Department of Vietnam Customs to conduct price consultations for shipments with suspected undervaluation.

According to the leadership of Saigon port area 1 customs branch, through the price consultation process, customs authorities have discovered that some businesses importing goods have declared taxable values significantly lower than the reference prices provided by customs authorities on various information channels. In addition to high-value goods, low-value goods have also been undervalued. For example, porcelain statues imported from China were declared at only US$0.15 per statue, but after consultation, customs authorities increased the value to US$1.7 per statue; and the price of funeral vases increased from US$0.15 per piece to US$1.2 per piece. The total additional tax revenue from this shipment was nearly VND 500 million.

Through price consultations, from the beginning of 2024 to August 15, 2024, Saigon port area 1 customs branch conducted consultations for 10,700 declarations, rejecting the declared values of businesses in 5,402 declarations, resulting in an additional tax revenue of VND36.42 billion.

Increased revenue by nearly VND100 billion

Ho Chi Minh City Customs has successfully rejected numerous cases of undervalued import and export declarations, resulting in adjusted taxable values and ensuring accurate and full tax collection for the state budget. As of August 15, 2024, the Customs Department has conducted price consultations for 17,495 import declarations, rejecting the declared values in 5,947 cases and increasing state revenue by over VND92 billion. Products subject to increased tax revenue after price consultations include general merchandise, alcoholic beverages, tiles, food, refrigerators, electronics, and more.

Numerous customs branches have prioritized efforts to combat revenue loss through price consultations. The Investment Customs Branch, which is responsible for customs administration and procedures for imports and exports of goods by foreign direct investment (FDI) enterprises, enterprises implementing domestic preferential investment projects, and projects using ODA capital, has a diverse range of imported and exported goods, including many new products. Therefore, price consultations must be conducted regularly.

In the past 8 months, the Investment Customs Branch has conducted price consultations for over 4,800 customs declarations, rejecting the declared values in over 1,000 declarations and increasing state revenue by over VND38.3 billion. Notably, several product categories experienced significant tax increases, including household electrical appliances (over VND16 billion), toothpaste (over VND5.5 billion), cosmetics (over VND10 billion), instant noodles, and snacks (over VND1.2 billion). Through the consultation on imported toothpaste, the branch adjusted the taxable value from US$0.9 per box (as declared) to US$1.64 per box, resulting in an additional tax revenue of over VND760 million for the shipment. Similarly, for imported ice cream, the declared price of US$1.99 per box was rejected, and the taxable value was adjusted to US$4.54 per box, increasing the tax revenue for the shipment by nearly VND400 million.

Recognizing that combating tax evasion through price verification is a crucial task, Ho Chi Minh City Customs will continue to implement a comprehensive range of measures for inspecting, consulting, and determining taxable values in accordance with relevant regulations. The Import-Export Duty Division will actively cooperate with branches to organize prompt, accurate, and efficient consultations, ensuring the collection of full and correct taxes for the state budget. The division will focus on closely inspecting high-volume, high-tariff product groups, such as exported resources, raw minerals, metal scrap, imported consumer goods with high import tariffs, goods subject to special consumption tax, safeguard duties, or anti-dumping duties. It will also carefully inspect and control customs clearance declarations under the green channel within 60 days to prevent businesses from committing value-related fraud.

Furthermore, Ho Chi Minh City Customs will regularly conduct periodic inspections of import and export shipments falling under the risk management categories for value as issued by the General Department of Vietnam Customs. The department will also review and propose amendments and supplements to the Risk Category List for import and export goods and the accompanying inspection prices to align with fluctuations in import and export goods prices.