Unmask tax fraud through importing raw cashews

Recently, Customs sector has detected many cases of smuggled cashews. Photo: T.H.

Hire director to establish business

Dai Tai Trading - Service - Production Co., Ltd. (referred to Dai Tai Company) headquarterd in District 7, Ho Chi Minh City, came to Binh Phuoc to open a customs declaration for importing raw cashews. Detecting suspicious signs from import of raw cashews of this company, the Anti-Smuggling and Investigation Department conducted verification.

Through inspection, Customs authorities discovered that from July 19 to September 25, 2017, Dai Tai Company implemented procedures to open five customs declarations at Chon Thanh Customs Branch - Binh Phuoc Customs Department imported 35 containers (more than 920 tonnes) of raw cashews from Singapore in the form of importing raw materials for export production. The total value of the goods was nearly VND 42 billion and it was exempted from import duty (5 percent) to the tune of more than VND 2 billion. However, Dai Tai Company has not opened an export declaration for exporting products as prescribed and there were signs of company dissolution to achieve tax evasion.

Through verification, Customs authorities discovered that Dai Tai Company did not conduct production and business activities at the registered office, as well as export products for the raw cashews.

Working with Customs authority, Director of Dai Tai Company Nguyen Trung Tuan said that he was asked to be director of the company by Vu Tran Duc Duy. All dossiers and vouchers were signed by Tuan. Duy also admitted that he was the true owner of Dai Tai Company and asked Vu Tran Huong Thuy (his younger sister), Tran Tuan An (chief accountant) and Nguyen Trung Tuan (relatives of Duy) to be the legal representatives of Dai Tai Company. From July 19, 2017 to September 25, 2017, Duy directed Thuy to carry out procedures for three import declarations and An carried out the procedures for two import declarations to import 920,431 tonnes of raw cashews originating from Côte d'Ivoire (Africa).

Côte d'Ivoire was not in the "List of countries registered to export foods originating from plant to Vietnam" published by the Ministry of Agriculture and Rural Development. So Dai Tai Company was not allowed to import the five consignments for import business, Dai Tai Company carried out import procedures under the form of import for export production which was subjected to import duty exemption. However, after importing, they did not manufacture for export production as prescribed and brought all of the cashews to the domestic market for consumption, without declaring them to the customs authority.

Collusion of tax evasion group

Not only the case mentioned above, in recent years, Customs authorities have discovered subjects colluding with groups to hire people for signing up an enterprise importing raw cashews and arbitrarily bring to market for consumption and tax evasion. The Thai Binh Agricultural Import Export Joint Stock Company (business registered at 67/35 Xo Viet Nghe Tinh, Ward 17, Binh Thanh District, Ho Chi Minh City) is a typical example.

This company was led by Thai Binh Duong (was born in 1990) as director. From September 8, 2016 to January 15, 2018, Thai Binh Agricultural Import Export Joint Stock Company opened more thab 70 customs declarations at Chon Thanh Customs Branch for importing raw cashews from African countries to Vietnam under the form of importing for export production to enjoy preferential tariffs, as well as conditions for importing goods.

Through checking contract performance process of Thai Binh Agricultural Import-Export Joint Stock Company, customs authorities found the amount of exports was very small compared to imported quantity and inventory. After inspection, Customs authorities found this enterprise violated the "use of goods eligible for tax exemption for improper purposes without declaring conversion of use purpose as prescribed".

During the verification process, Customs authorities discovered that lots of shipments of imported cashews of this company were not transported to production facilities in Dong Phu district as prescribed but were transported directly to destination locations in Bu Dop district (60-90 km from the production facility). From inspection results, Chon Thanh Customs Branch issued a decision of imposing tax on exported and imported goods of Thai Binh Agricultural Import-Export Joint Stock Company, with the amount of payable tax VND 21 billion.

However, due to the complex operations of this enterprise, Chon Thanh Customs Branch coordinated with Unit 3, Anti-smuggling and Investigation Department to clarify. During the process of preparing the application of the coercive measure for distrainting of assets to ensure recovery of tax , the customs authorities repeatedly contacted Thai Binh Duong as legal representative of Thai Binh Agricultural Import Export Joint Stock Company but there was no answer. Conducting verification at the headquarters of this company, it showed that the company was no longer operating at the registered address. However, after the case was discovered, individuals and enterprises came to work with the Customs authorities and claimed they were goods owners and the goods were stored in the warehouse of Thai Binh Agricultural Import Export Joint Stock Company at Thai Dung hamlet, Tan Tien commune, Dong Phu district, Binh Phuoc province.

While working with the Customs authorities, those people all said they had no business relationship with Thai Binh Agricultural Import Export Joint Stock Company. However, documents provided by the bank showed those people had a lot of transactions with Thai Binh Agricultural Import Export Joint Stock Company, with the amount of 10 of billion VND. From this lack of transparency, the leader of Unit 3 of Anti-Smuggling and Investigation Department said the above case featured collusion between a group of subjects who operated business activities of cashews for a long time. Those subjects were in the name of establishing companies for importing and exporting raw cashews and tax evasion.