Lo Thi Nhu, head of the Viet Nam Customs' Import-Export Duty Department, talks to Thoi bao Kinh te Viet Nam (Viet Nam Economic Times) about missed tax collection targets.
This year has become the second year in a row to see Viet Nam Customs not being able to fulfill its assigned task of tax collection by the National Assembly. What's the situation of the collection of import-export duty in the last four months?
In 2013, Viet Nam Customs was assigned by the National Assembly, the Government and the Ministry of Finance to collect VND237,500 billion ($11.309 million). On average, each month we have to collect VND 19.792 billion ($ 942 million). However, in the last four months, we achieved only 23.5 per cent of the target - a decrease of six per cent compared with the same period last year, despite a sharp increase in export duty compared with that of the same period last year.
One of the reasons leading to our failure is the Government's decisions to reduce import taxes levied on many commodities, including petroleum and diesel, motor vehicle units, motor cycles and their spare parts and other items.
Other causes leading to the problem include increasing over due debts. By the end of 2012, over due debts to our department alone totalled VND 5,812 billion ($276 million) - an increase of VND 929 billion ($44 million) compared with the previous year.
What are the solutions to this problem?
I should say that most of the bad debts arose before the Law on Import and Export Duties was enforced on July 1, 2007.
Under the law, no sanctions are mentioned if enterprises fail to pay their debt or delay in their debt payments. At present, many enterprises have declared bankruptcy or dissolved, as a result, my department has to bear the burden of bad debts.
The law's implementation actively contributed to transparency and accountability in customs clearance procedures for both the customs offices and the enterprises themselves.
However, there are some constraints in the law's implementation, this is because it does not need any guarantee for goods temporarily imported for re-export or for use in the country (except consumption commodities). This creates a loop hole for many firms to delay fulfilling their responsibilities.
Another reason that should be mentioned is that in 2012 the national economy faced many difficulties while monetary policies were being tightened. In the end, enterprises were the ones seriously affected by such policies.
To overcome these problems, the customs office has asked the National Assembly to amend the Law on Import-Export Duties and the decrees 85/2007/ND-CP and 106/2010 ND-CP; and the circular 194/2010/TT-BTC to enable the tax office to accomplish their assignment. For example, we asked the Government to set a deadline for enterprises to pay their import duties of 275 days following customs clearance.
In addition, Viet Nam Customs also asked the Government to impose severe sanctions on companies that intentionally avoid their responsibilities.
What do you want the Government and the Ministry of Finance to do to help Viet Nam Customs accomplish this?
We petition the Government and the Ministry of Finance not to give preferential treatment to some goods imported to free trade zones; to cease the temporary import and re-export of petroleum and diesel on sea routes; and to put a cap on tax returns at economic zones for commodities posing high risks or that are not used for production/business in the country such as beer, glutamate, diary products and electronics. — VNS