Solutions to Customs Administrative Procedure Reform

In 2015, Vietnam’s customs sector has advanced its reform and modernisation efforts to comply with international standards, practices and commitments. The customs sector has actively carried out many consistent solutions for this purpose, such as perfecting the customs legal system towards simplification of administrative procedures, deploying VNACCS/VCIS automated customs clearance system on a national scale, enhancing information technology application by the adoption of electronic signatures, electronic payment (E-Payment), and electronic commodity manifests (E-manifest) at seaports, expanding the application of barcodes in seaport monitoring, deploying the Amended Customer Service Declaration 2015, and actively introducing measures against negative acts and corruption. These are also specific measures that the customs sector has implemented to realise reform goals of the Vietnam Customs Development Strategy to 2020, the Vietnam Customs Reform, Development and Modernisation Plan in 2011 - 2015, Resolution 19/2014/NQ-CP and Resolution 19/2015/NQ-CP of the Government on reduced time of customs clearance in Vietnam towards ASEAN-6 average in 2015 and ASEAN-4 average in 2016, and the Directive 24/CT-TTg of the Prime Minister dated August 5, 2014 on strengthened tax and customs management and administration reform to speed up customs reform and modernisation.

 

In 2015, VCCI conducted a survey on business satisfaction of customs administrative procedures. This programme was a joint effort of VCCI, the General Department of Vietnam Customs, and the USAID Governance for Inclusive Growth Programme (USAID GIG). The survey had 3,123 regular exporters and importers take part in. This survey enabled VCCI to draw up a summary of recommendations of the business community to the customs service sector in the coming time.

 

Accordingly, improving the quality of customs documents is a top concern of businesses. Although regulations on customs have been amended and improved quickly in recent years to further facilitate export and import, the relatively quick issue of amended, supplemented and replaced documents distressed companies as they were not quick enough to grasp new changes (e.g. they are not updated Circular 22/2014/TT BTC but it was already replaced by Circular 38/2015/TT-BTC). Besides, many documents are too long with unclear, inconsistent definitions and terms, resulting in misinterpretation and disjointed application between customs authorities, businesses and other agencies.

 

So, VCCI recommended improving the quality of legal texts on customs. These documents need to have explicit contents to create unified understanding among customs authorities, businesses and other agencies.

 

Besides, it is necessary to simplify some customs procedures as they lack clarity and reasonableness like procedures for cancellation of declaration forms, correction of declaration forms, and on-site import and export procedures. The analysis and classification of freight samples requires so much time and many samples.

 

Many companies said post-clearance inspection is improper, citing that post-clearance inspection is also carried on actually checked declaration forms. The settlement of inconsistent data between customs agencies and businesses in outsourcing and export-oriented production is unreasonable. The retrospective collection of taxes on differentiated values is inappropriate, thus distressing businesses.

 

Guidance on settlement reporting procedures, applicable to outsourcing and export production, is insufficient. Many companies do not know how to make reports and they prefer using old procedures. Inconsistent regulations on customs procedures between customs authorities and other regulatory agencies are also a big issue. For example, customs authorities specify no confirmation on declaration forms but tax authorities require the confirmation of customs authorities on such declaration forms.

Particularly, companies think that it is essential to improve tax-related processes and procedures. Tax-related policies are still unreasonable in some points, e.g. regulations on tax payment applied to goods temporarily imported for re-export and imported goods via express courier sold to export processing companies. Tax exemption and reduction procedures and provisions are unclear, including the list of products which are already domestically made as specified in the in Circular 04/2012/TT-BKH of the Ministry of Planning and Investment. Provisions on compulsory tax payment prior to customs clearance applied to law-obedient companies are irrational as it will discourage enterprises from abiding by the law. The deadline for tax payment for raw materials used to manufacture exports with a production cycle of more than 275 days needs to be reconsidered. Procedures and regulations on tax exemption and reduction are cumbersome and time-consuming, particularly when they are modified.

 

The circulation of tax payment documents among banks, treasuries and customs authorities is not good and inconvenient to businesses in giving proofs of tax payment for opened declarations. Even, a commodity is imposed different codes by different customs agencies. Many companies complained that signatures on specially treated C/Os are not timely updated and it takes time to verify in case of differences from specimen signatures. In these cases, customs authorities usually require businesses to pay high-rate taxes in advance and refund the surplus after they have verification.

 

In addition, companies also asked for better customs service, means, expertise and attitude of customs officers. Remarkably, the highly appreciated VNACCS system still exposes some shortcomings like wrong notifications of declaration forms missing, tax debts and fee debts, failure in declaration for return of temporarily imported equipment in the G23 form, S0218-SS1-0000 error (failure in export licence selection), overlapped code systems among others. Declaration forms also are hard-looking and confusing layout, which usually results in wrong information input. Asynchronous technological infrastructure, slow transmission lines, frequent network congestions, slow tax payment information update, and bureaucratic tax officers are popular distresses of companies.

 

Currently, there are so many documents on specialised management of exports and imports issued by various ministries. Many regulations are unclear and whimsical. The duration from the issue date to the effective date of new documents is too short to adapt. Specialised inspection and management is overlapping: A commodity must have a certificate of conformity and satisfy individual check at import ports. Companies must apply for permits and quality checks for one commodity. There are so many licences and a licence is issued repeatedly.

 

Specialised inspection scope is too broad and specialised duration is too long while relevant authorities lack coordination and information sharing with each other to ease procedures.

 

Hence, VCCI recommended that customs authorities share information and data with specialised inspection and management bodies via electronic networks to reduce records, procedures, time and costs for businesses. VCCI also proposed removing State quality inspection for internationally registered commodities. The time of issue and enactment of legal documents must be long enough for businesses to adapt and grasp.