Analysis and classification, based on names and code numbers, is the basis of imposing tariff rates on imports and exports. This is an effective instrument of the Vietnamese customs sector in the battle against trade fraud. However, to use this instrument fairly for all enterprises and prevent tax losses for the state budget, cooperation among enterprises and customs authorities is necessary. Vietnam Business Forum has an interview with Mr Nguyen Ngoc Huan, Deputy Director of Import-Export Analysis and Classification Centre under the General Department of Customs, on this issue. Huong Ly and Minh Hai report.
Regarded as one of the most important methods to combat commercial fraud, what has the Vietnamese customs sector done to apply analysing and classifying work effectively?
In fact, after eight years of operation, the import and export analysing and classifying process needs modernising and legalising further to meet new requirements. The Import Export Analysis and Classification Centre is quite young in comparison with its counterparts in the world. For instance, Japan set up a similar entity in 1963 and India in 1989. Many American and European countries had it since the 19th century.
After eight years of construction and development, it has confirmed its prestige, role and position in the customs sector, the business community, ministries and agencies. Apart from analysis and classification, we are also a primary trainer for import export analysing and classifying staffs for customs offices and enterprises.
What the Import Export Analysis and Classification Centre notifies is a basis for customs agencies to determine names, identification numbers and tax rates of exported and imported goods. To date, the centre has analysed and classified more than 66,000 export and import samples, which are mainly chemicals (70 percent), fabrics, paper, iron, steel and electronics appliances. Most of analysis and classification results are used by customs offices for clearing exports and imports. Enterprises generally trust and accept the centre’s results. Analysis and classification results have reportedly changed some 60 percent of ID codes, with 25-30 percent of changes imposed higher taxes and 8 percent of changes subjected to lower tax rates.
In addition to analysis and classification results, the customs sector has many functional agencies providing other evaluation and superintendence results. This easily leads to the disagreement between enterprises and customs offices. What are the causes?
Analysis and classification results provided by customs authorities showed that, as regards commodities subjected to analysis and classification, owners gave accurate declarations for only 35 -40 percent of goods. Basically, customs authorities and enterprises agreed on the centre’s analysis and classification results in 66,000 samples. Of course, enterprises disagreed with some results but the percentage was very small.
The disagreement came from various reasons, primarily because of their insufficient knowledge of commodity analysis and classification. Enterprises themselves did not care much about this work and did not ask their partners to provide enough information about their products. When the information was not enough, it was easy to classify goods incorrectly.
At present, in many other countries, authorities have the right to decide and determine the nature of goods while the right to classify goods solely belongs to customs authorities. However, Vietnam has not clearly assigned the ultimate classifying function to any agency. Thus, any authoritative agency has the right to classify. And, enterprises do not know valid results for their goods cleared at customs offices.
Do you have any advice for exporters and importers?
Exporters and importers need to constantly update information about tax and customs policies because these policies are changed to match new development requirements of the nation. This will help them analyse and classify their goods correctly to have appropriate business strategies. In case of any discrepancy in results, they should meet and talk with customs authorities. Then, they can ask competent bodies to provide information, criteria and methods for sorting.
What are the roadmap for improving goods analysing and classifying activities?
We have now completed the import and export analysing and classifying development plan for the period from now till 2015, with vision to 2020. Our highest objective is to professionalise and modernise the analysing and classifying process in line with the model recommended by the World Customs Organisation (WCO) in a bid to collect right and enough taxes for the State Budget, protect the community, environment and social security and create the transparent and objective business environment for enterprises.
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