The Customs: Challenges of State budget collection in the last two months

	Customs must collect 24 trillion VND in each remaining month
	Customs revenues tends to decrease
	Customs revenues reached more than 100.8% of target

Customs officers at Cai Lan Port Customs Branch, Quang Ninh Customs Department was inspecting imported cars. Photo: T.Trang.

Revenue growth rate gradually decreases

According to the statistics of the General Department of Customs, the State revenue of the Customs was in the first ten months of 2017 was estimated at 237 trillion VND, reaching 83.15% of the estimate and 80.33% of the target (295 trillion VND). With the above collection speed, to complete the estimate of 285 trillion VDN, the Customs must collect 24 trillion per remaining month. In order to reach the target of 295 trillion VND, the Customs must collect 29 trillion VND per remaining month. Meanwhile, the monthly revenue of the first ten months was only 23,700 billion VND. Thus, this is an extremely difficult task.

It is fact that if the Customs revenue in the first quarter increased 23.3% compared to the same period in 2016, by the end of April, 2017, the revenue only rose 16.7% and by the end of May, 2017 only 13.24%, and in June 11% and be the end of July, August, September and October only nearly 10% compared to the same period in 2016. This trend goes backwards the rule of the previous years, causing difficulties for revenue collection of the Customs in the last months of the year.

Looking back on the Customs revenue from the beginning of the year, we can find that the Customs revenue in the first three months reached 66,800 billion VND, accounting for 23.44% of the estimate, up by 23.3% compared to same period of 2016. This revenue was due to import turnover of some commodities: Machinery, equipment, spare part up by 28.3%, computer, electronic products and components up 15%; plastic materials up 21.2%, CBU cars up by 43.4% compared to the same period in 2016 (only imported less-than-9 seat-cars in the three months were 14,410 units)

However, till the end of July, 2017, the Customs revenue was estimated at 165,646 billion VND, equal to 58.1% of the estimate and only up by 9.3% compared to the same period in 2016. On July 2017, the revenue was 22.565 billion VND, 2,241 billion VND lower than it in June 2016. The decrease in the revenue of July, 2017 compared to June, 2017 was mainly due to a decrease of 0.8% in import and export turnover which gradually decreased in key commodities: petroleum down 206 billion VND, pharmaceutical products down 102 billion VND, Steel and ordinary metals down 85 billion VND and electric appliances down 260 billion VND and CUB cars down 745 billion VND (imported less-than-9 seat- CBU cars were 2,537 units, down by 703 units, equivalent to 602 billion VND; and down by 1,870 units compared to the frist six months of 2017, equivalent to 805 billion VND).

Mr. Luu Manh Tuong- Director of the Import-Export Tax Department said that the revenue collection of the Customs becomes more difficult in the last months of 2017. Although the growth rate of import-export turnover remained high over the same period, the revenue growth rate gradually decreased over the same period. This is due to the implementation of international commitments and the impacts of Free Trade Agreements (FTAs) which have led to the change of import flow from countries in the area that does not enjoy preferential tariffs to countries in the area that enjoys preferential tariffs, thereby directly affecting to the Customs revenue.

In which, the most typical commodity was imported CBU cars. In September and October, the imported CBU cars fell significantly, to 900 cars in September and to 800 cars in October. Accordingly, as calculated by the Import-Export Tax Department, the Customs revenue as the calculation decreased 5,2000 billion VND compared to the estimate.

One of the notable things is that the monthly turnover of 2017 rose but the revenue gradually decreased compared to same period of 2016. According to the analysis of the Import-Export Tax Department, though the turnover of October rose by 21.3% compared to the same period in 2016, the revenue only increased over 10% due to the decrease in export turnover of crude oil, in volume of imported petroleum and price and tariff rate compared to the same period in 2016. Besides, the import turnover of some key commodities with large revenue also sharply decreased compared to the same period in 2016. In addition, there are many other factors which cause the decrease in the revenue such as cutting tax when joining FTAs.

Make the best effort to fulfil the target

Predicting difficulties, the whole Customs applied synchronously and drastic measures to ensure state budget revenues such as creating favourable conditions for import and export activities, actively combating smuggling, trade fraud, enhancing post-customs clearance audit, advance ruling on price under the list of risks in terms of added and amended value. The General Department of Customs has developed specific solutions to collect revenue in the remaining months of 2017, make the best efforts to fulfil the target of 295,000 billion.

Accordingly, the General Department of Customs issued an official dispatch to the municipal and provincial Customs departments to adjust the targets of state revenue in 2017 in line with the actual situation, the collection ability and factors affect the revenue collection in the remaining months of the year, whereby 23 of 35 Customs Departments have to adjust the targets.

At the same time, the General Department of Customs also requires the units to develop detailed plans and implement in the most effective way the measures for revenue collection in the remaining months of the year. In which, focusing on measures to facilitate the production and business activities of enterprises, reforming administrative procedures, shortening the Customs clearance time in parallel with the measures to combat against trade fraud and loss of tax revenue to fulfil the targets set by the General Department of Customs.

Furthermore, the General Department of Customs requests the units to continue to implement issued measures for revenue collection. In which, concentrating on measures to prevent the loss of revenues such as: fighting against loss of revenues via amount, value, code, C/O and actively applying measures to manage the collection and urge the collection of debts. In addition, strengthening post-clearance audit and anti-smuggling, anti-trade fraud in key areas, focusing on internal inspection and audit, applying risk management method, enhancing Customs inspection and supervision and tightening Customs rules and disciplines. Especially, drastically applying trade facilitation method through modernization of Customs supervision and collection of debts.

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In the last two months, the municipal and provincial Customs units are making their best efforts to implement many measures to reach the assigned target of State budget collection. Some units have deployed many measures such as enhancing post-clearance audit at border gates for key imported goods and concentrated on implementing measures to prevent loss of state revenues such as: recovery and handling of tax debts, tax inspection and audit.