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Economic Sector

Last updated: Wednesday, November 22, 2017

 

Customs-based Budget Revenue: Hardships on the Way

Posted: Monday, October 16, 2017


The customs sector collected VND214 trillion (nearly US$10 billion) for the State Budget in the first nine months of 2017, equal to 75 per cent of the full-year estimate and up 10.16 per cent from the same period of 2016, said the General Department of Vietnam Customs.

Vietnam’s export and import value grossed US$37.6 billion in September, 0.9 per cent lower than the previous month. Of the sum, exports valued US$19 billion, down 3.9 percent, and imports were worth US$18.6 billion, up 2.3 percent. And, the customs sector collected VND22 trillion (US$1 billion) from taxes in the month.

Some key imports declined marginally in September. The country spent US$9 billion on machinery, equipment, tools and spare parts in the month, down 0.7 per cent from the previous month; US$782 million on iron and steel, down 1.6 per cent month on month; and US$330 million on chemicals, down 3.5 per cent.

Meanwhile, many imports picked up in September. Vietnam expended US$3.6 billion on computers, electronic products and components in the month, up 17.4 per cent from August; US$1.75 billion on telephones, accessories and parts, up 19.6 per cent month on month; US$440 million on inputs for garment and textile and leather and footwear production, up 1.9 percent; US$596 million on petroleum products, up 0.8 per cent; and US$500 million on metals, up 12.3 percent.

The three-quarter data showed a 23.3 per cent year on year growth in the first quarter, a 13.6 per cent growth in the second quarter and 9.3 per cent growth in the third quarter. An official from the Import-Export Tax Department said this movement was opposite to previous years, because imports usually tended to go up in late months of the year. This reality indicated that the customs sector will find it harder to collect taxes towards the end of 2017. Although import-export growth was still higher over the same period of 2016, the magnitude narrowed over the time due to Vietnam’s international commitments and FTA impacts. Many exporters shifted from countries without preferential duties in trade with Vietnam to countries with preferential tariffs. As a result, tax collection performed by the customs sector was directly affected.

Taking import duties on automobiles as example, both importers and buyers of the four-wheeler chose to wait until 2018 when auto import duties are reduced to zero. Besides, the tax revenue depends on high-valued commodities such as petroleum products or on the result of smuggling and trade fraud prevention. In order to complete the task of collecting taxes for the State Budget in 2017, the customs sector will accelerate customs and tax procedure reform and provide favourable conditions for importers and exporters. In addition, customs authorities will focus on reviewing tax debts and propose appropriate debt settlement solutions to collect overdue taxes. The General Department of Vietnam Customs will also urge its subordinates to intensify post-clearance inspection and internal auditing while strengthening control against smuggling and trade fraud. In 2017, the customs sector was assigned to collect VND290 trillion (US$12.8 billion) for the State Budget.

Le Hien








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