What does Hanoi Customs do to revive revenue?

VCN – 11of 13 key groups of imported taxable items that go through procedures at the Hanoi Customs Department decreased, greatly affecting the revenue of the unit. To fulfill the revenue target of VND33,160 billion in 2023, Hanoi Customs needs many solutions to achieve the target.
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Officials of the Customs Branch of North Thang Long Industrial Park (Hanoi Customs Department) inspects import and export goods. Photo: N.Linh
Officials of the Customs Branch of North Thang Long Industrial Park (Hanoi Customs Department) inspects import and export goods. Photo: N.Linh

Revenue is only 84.58% of the same period last year

Deputy Head of the Import-Export Tax Division (Hanoi Customs Department) Nguyen Xuan Tien said that as of June 30, the total import and export turnover through Hanoi Customs Department reached US$27.7 billion, down 12.2% year-on-year.

Notably, taxable turnover declined 29.1% year-on-year to US$4.2 billion. Of which, 13 imported groups with high turnover and high tax rates and regularly going through customs procedures at the Hanoi Customs Department in the first six months of 2023 accounted for 73.1% of the tax receivable of the whole Department.

In particular, two groups saw a rise in turnover, including: other means of transport and spare parts grew 51.1% year-on-year to US$100 million; CBU cars with less than 9 seats reached US$87 million. However, 11 groups recorded a decrease of 28.3% to US$2.9 billion in turnover over the same period last year, of which the group with the strongest decrease is tobacco ingredients; chemicals and products; computers, electronic products and components; auto parts and accessories.

The decrease in the turnover of key commodities has greatly affected the revenue of the Hanoi Customs Department. The leader of the Import-Export Tax Division said that as of June 30, 2023, Hanoi Customs collected VND 14,178 billion, only reaching 42.8% of the assigned estimate, reaching 84.58% over the same period last year. Of which, Hanoi area, as of June 30, 2023, earned VND11,122 billion, reaching 41.2% of the assigned estimate, equaling 85.76% compared to the same period last year (VND11,122 billion VND/12,969 billion VND) and areas outside Hanoi, earned VND3,056 billion, reaching 49.6% of the assigned estimate, equaling 80.52% over the same period last year.

According to Hanoi Customs, the decrease in revenue in the first six months is due to the slowing down of import and export activities and the lack of foreign orders of many businesses. Some major commodities groups plummeted significantly in taxable import turnover and budget revenue.

Moreover, from the end of 2022, the Government has issued 17 preferential import-export tariff schedules to implement 17 FTAs in the 2022 – 2027 period. Therefore, even in 2023, tax rates of many imported goods with high tax rates have been cut and continue to decrease in the following years.

"Export orders decreased, so the demand for importing raw materials and accessories for production also decreased," said Mr. Nguyen Xuan Tien. Specifically, imports of tobacco ingredients reached plunged 91.2% year-on-year to US$2 million; chemicals and chemical products declined 54.1% year-on-year to US$ 219 million; computers, electronic products and components decreased 44.3% year-on-year to US$519 million; and auto components and spare parts with declined 35.9% year-on-year to US$257 million.

Closely following the situation

Hanoi Customs forecast that the budget revenue in the last six months of the year will continue to face many pressures due to the implementation of Resolution 101/2023/QH15 dated June 24, 2023 of the National Assembly, Decree No. 44/2023/ND -CP dated June 30, 2023 of the Government on the implementation of VAT reduction, effective from July 1, 2023, it is estimated that the VAT amount will reduce by about VND 1,800 billion. Along with that, under the Government's Decree No. 26/2023/ND-CP dated May 31, 2023, export tax rates of some items reduce such as fertilizers, charcoal; some items with reduced import tax rates are Ethanol, petroleum-based oil products, and unused rubber tires. Meanwhile, in 2023, the Hanoi Customs Department was assigned to collect VND33,160 billion from import-export activities in five provinces and cities: Hanoi, Vinh Phuc, Phu Tho, Yen Bai, Hoa Binh (under the management by Hanoi Customs Department), up 20.9% compared to the 2022 estimate.

To fulfil this task, the Import-Export Tax Division said that Hanoi Customs shall focus on drastically deploy two solutions of trade facilitation and work performance.

In particular, the unit continues to implement the key solutions set out at the beginning of the year, promptly solve problems, thereby shortening customs clearance time, reducing costs, and creating maximum convenience for businesses. Assigning customs officials at all levels to directly support, consult and solve problems in the customs clearance for import and export goods and goods in transit for enterprises. Especially, organizing partnership and coordination programs with business associations, relevant authorities, organizations, import-export enterprises to exchange, provide information and support law compliance to prevent and avoid violations of customs laws.

For solutions on work performance, Hanoi Customs shall focus on solutions to improve the effectiveness of state management, prevent revenue loss, and trade fraud. In particular, the unit will strengthen the inspection of goods and businesses showing signs of taking advantage of HS change for smuggling and trade fraud when implementing Circular No. 31/2022/TT-BTC dated 8 June 2022 of the Ministry of Finance on the List of Vietnam's import and export goods. At the same time, Hanoi Customs shall strengthen the management of customs value both in customs clearance and after customs clearance, in which focusing on management for export goods with high tax rates such as natural resources, raw minerals, metal scraps; imported goods as consumer goods with high import tax rates, goods subject to special consumption tax or self-defense, anti-dumping tax...

According to the Import-Export Tax Division, activities to assess the state of budget revenue will be implemented closely and regularly to analyze the increase and decrease in revenue each month, thereby offering measures to ensure revenue, promptly remove difficulties and obstacles, creating maximum consensus for businesses.

By Ngoc Linh/ Huyen Trang

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