Import and Export Tax Revenue Drops over VND24 Trillion

9:21:43 AM | 6/16/2020

Declining commodity demand, difficult commodity clearance and weakening company health has indirectly impacted the State budget revenue collected by the customs sector in May, which is forecast to fall by 9%.

Direct impact by the epidemic

Vietnam’s trade value was estimated at US$37.24 billion in May, up 3.15% from April and down 16.85% from May 2019. Of the sum, taxed imports and imports valued US$8 billion, down 1.9% from April. The merchandise trade value reached US$197.03 billion in the January-May period, down 2.85% year on year, of which taxed commodities accounted for US$41.74 billion, down 12.6% year on year.

There was a sharp decline in the export value of taxed goods like ores and other minerals (down by 19.7% in volume and 23.1% in price), crude oil (down 27.3% in value). High-valued imports also slumped, including automobiles valued at US$794 million (down 42.6%) with the tax value collected at VND11,014 billion, a decrease of VND7,829 billion; machinery, equipment and parts with US$6.88 billion (down 12.3%) with the tax amount at VND17,696 billion, a decrease of VND2,847 billion; automobile components with US$1.2 billion (down 22.9%) with the tax value at VND6,260 billion, down VND2,377 billion; and computers, electronic products and parts with US$1.66 billion (down 41.6%) with the tax value at VND4,349 billion, down VND3,078 billion.

Especially, imported petroleum products fell by a record 43.4% over the same period in 2019.

The above data showed that the total value of imports and exports has greatly affected the State budget income collected by the customs sector. Accordingly, the sector fetched VND123,485 billion in the first five months of 2020, equaling 36.5% of the full-year estimate and 34.8% of the target, a decrease of VND25,621 billion. The tax revenue was down 17.18% from the January-May period of 2019 (VND149,106 billion).

Some customs departments witnessed a sharp decline in revenue from a year-ago period. Ho Chi Minh City Customs Department reported a slump by 19.3%, the Hai Phong Customs Department by 25.74%, the Dong Nai Customs Department by 24.76%, the Ba Ria - Vung Tau Customs Department by 17.98%, the Bac Ninh Customs Department by 15.1%, the Ha Nam Ninh Customs Department by 17.2% the Hanoi Customs Department by 5.8%, and the Binh Duong Customs Department by 6.8%.

A representative of the Import and Export Tax Bureau said that these eight departments usually accounted for over 83% of the sector’s estimated tax value. Meanwhile, by the end of May, their combined value accounted for only 63.69%, down 19.3% from the same period in 2019 (or a drop of about VND22,270 billion).

To fulfil the initial target, the sector must collect VND28,166 billion a month on average for the rest of the year, while it made just VND24,000 billion a month in the first five months of 2020. Meanwhile, the sharp slump of imported petroleum and automobile led to a reduction of nearly VND7 billion of special consumption tax. A lot of export and import deals signed by companies were delayed or cancelled because of the Covid-19 epidemic. The value-added tax (VAT) also declined by nearly VND14 trillion in the period.

In particular, in May only, the tax revenue collected by the customs sector was only VND21,257 billion, down to 9% (VND2,104 billion) from April because export and import activity was badly affected by complicated Covid-19 developments in many countries around the world. The total value of taxed goods in May was down 1.9% from April to US$8 billion.

Increased support measures for businesses

Mr. Nguyen Van Can, General Director of the General Department of Customs, emphasized that although the Covid-19 pandemic tended to decrease in Vietnam, its impacts on socioeconomic situation, including customs, are still huge. To ensure the good performance of assigned tasks, in the coming time, especially this June, the customs sector needs to further focus on applying information technology for customs reform and modernization. Scanning procedures will be applied to key shipments at Hai Phong and Ho Chi Minh City customs offices.

In addition, the whole needs to boost solutions to reform administrative procedures, facilitate trade, and remove difficulties and obstacles for the business community to stabilize and restore production after the Covid-19 epidemic. In addition, customs units need to strengthen solutions to seek new revenue sources, monitor, follow up and firmly grasp operations and the impact degree on each enterprise to have timely support solutions for them and prevent trade fraud, smuggling, flight and missing.

By Le Hien, Vietnam Business Forum