Why does customs revenue plunge?

VCN – Statistics from the General Department of Vietnam Customs show that the State revenue from the first month of the year until now plunges by 19.37% year-on-year. The situation stems from the sharp decrease in the import turnover of some major products.
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Why does customs revenue plunge?
Officers of Vung Ang Seaport Customs Branch perform work. Photo: H.N

As of February 28, the whole Customs sector's revenue fell by 19.37% to VND 56,330 billion year-on-year, meeting 13.25% of the estimate. In February alone, the whole Customs sector only collected VND29,266 billion.

The representative of the Import and Export Duty Department said that total Vietnam's taxable import and export turnover dropped by 15.9% year-on-year, including taxable import turnover at US$ 17.3%, down 15.4% and taxable export turnover at US$ 1.03 billion, down 22.9% compared with the previous year.

Specifically, the taxable import turnover of groups of imported raw materials, machinery and equipment, spare parts for products such as coal, iron and steel and metals, products of iron, steel, chemical, and plastic reached US$ 6.8 billion, accounting for 39% of the total taxable import turnover, falling by 10-15% year-on-year, leading to the reduction in budget revenue of VND5,700 billion compared with the same period of the previous year.

The taxable import turnover of petroleum products and auto reached US$1.85 billion, accounting for 10.65% of the total import turnover, raising the revenue of VND6,300 billion compared with the same period of the year ago. However, the growth in turnover of auto due to the consumer demand during Tet, this revenue is not stable. On the other hand, the turnover of petroleum products rose but was not stable due to price fluctuations.

In addition, in the first two months of the year, the Customs refunded import duty worth about VND1,000 billion on auto parts under Article 7a of Decree 101/2021/ND-CP. As a result, VND3,600 billion is expected to be refunded in the year's first quarter.

In addition, the revenue collection at most local customs departments plunges. The revenue of nine out of 10 local customs departments that account for 87% of the estimate dropped. The 10 departments' revenue fell over 14% compared with the previous year and only reached VND 50,061 billion, meeting 13.59% of the estimate.

The revenue of Ha Tinh Customs Department saw the strongest decrease. Accordingly, in the first two months of the year, the department collected VND1,169 billion, reaching 10.66% of the estimate and down 45.35%.

As of February 28, Binh Duong Customs Department's revenue decreased by 39.95% to VND2,190 billion year-on-year, meeting 10.84% of the estimate. Some local customs departments also see a decrease in revenue as Dong Nai, Ba Ria-Vung Tau, Bac Ninh, Ha Noi, Hai Phong, Thanh Hoa and HCM city.

According to some economic experts, since the last months of the year, the import turnover of major imports such as raw materials for export production plummeted, without orders, especially for the textile and garment, footwear, furniture, industrial aluminium, steel, and cement.

In addition, implementing the tariff reduction roadmap under commitment to free trade agreements (FTAs). By the end of 2022, the Government issued 17 preferential import-export tariffs to implement 17 FTAs from 2022 to 2027. Therefore, in 2023, the tax rate of many imports subject to high tax will be reduced in the following years.

According to many experts, the revenue from coal imports accounts for a high proportion of total budget revenue. However, thermal power plants also reduce coal use and shift to the use of solar power and wind power, which will directly affect the revenue of Customs shortly.

To resolve these difficulties, the General Department of Vietnam Customs has requested that subordinate units implement solutions. The first solution is to expedite the Customs reform and modernization, resolve problems related to tax policy, tax administration, accounting mechanism, tax refund, and tax exemption, and remove difficulties and facilitate enterprises; coordinate with banks to pilot e-tax payment 24/7 to ensure that taxpayers can pay tax in any time, anywhere, and by any device.

The entire sector will focus on reviewing conditional import goods, independent transport shipments, goods temporarily imported for re-export, temporarily exported for re-import, in transit, and goods stored for customs clearance; inspect and detect violations in goods classification and assessment of value and origin of goods; identify suspicious signs, especially imported goods to create fixed assets of investment incentive projects, tax-free goods.

The top country's customs regulator has directed local customs departments to monitor revenues, implement solutions to raise revenue and prevent revenue loss, assess the impact of international integration commitments on the State budget revenue.

By Nu Bui/Ngoc Loan

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