Tan Cang-Cat Lai Terminal in Ho Chi Minh City

Shrinking import and export value

According to HCM City Customs Department, the sharp slump in many exports and imports caused the value to drop by more than US$4.2 billion in the first two months of 2023. According to statistics, the total merchandise import and export value was US$16.74 billion from January 1 to February 28, 2023, down 20.21% year on year. Of the sum, the export value reached US$7.59 billion, down 19.5% (or US$1.84 billion) and the import value accounted for US$9.15 billion, down 20.8% (or US$2.4 billion).

According to the department, the import and export value of taxed goods reached US$5.36 billion, down 18% year on year (or US$1.18 billion). Notably, the export value of taxed goods deeply plunged over 71% to only US$33.34 million (down US$81.62 million) while the import value was US$5.33 billion, down 17.11% (or US$1.1 billion).

The sharp decline in export and import value resulted in a considerable fall in budget revenue by VND1,084 billion in the first two months. Specifically, the 2-month value was US$16.74 billion. Of the sum, the taxed value slipped 18% to US$5.36 billion, leading to a 5.27% decrease of tax (or VND1,084.0.8 billion). Declining revenue was seen in many key products. The taxed import value of computers, electronic devices and components dived 52.8% to US$259.3 million, resulting in a 51.23% slump of tax revenue (by VND666 billion). Steel and iron value fell 43.3% to US$229.7 million, giving rise to a 40.9% drop in tax revenue (VND380 billion.

Notably, many big customs offices reported a deep contraction in revenue. Eight out of 12 customs offices witnessed a revenue decline from the same period of 2022. Offices suffering the largest drops included Customs Office Area 1 - Saigon Port which saw a dip of 14.75% (or VND1,300 billion); Invested Commodity Management Customs Office that suffered a 19.48% fall (or VND1,145.2 billion); and Tan Son Nhat International Airport Customs Office that incurred a 37.73% plunge (or VND604.8 billion).

Efforts for budgetary growth

According to the HCM City Customs Department, given the assigned target of VND145,800 billion, the department must fetch VND399.5 billion every day. However, the average daily budget revenue (from January 1, 2023 to March 14, 2023) at HCM City Customs was only VND342.9 billion, equal to 85.84% of the target. Among 12 branches, 11 reported a lower-than-target revenue. For example, Customs Office Area 3 - Saigon Port raked in VND64.6 billion a day on average, equal to 92.89% of the target of VND69.6 billion. The Customs Office for Processed Goods Management collected an average daily revenue of VND2 million, equal to 34.17% of the target of VND700 million.

Before this reality, the HCM City Customs Department has adopted many solutions to boost budgetary takings. Besides trade facilitation, the department has drastically implemented focused solutions to increase budget revenue. The agency has concentrated on reviewing and inspecting codes, tariff rates, value, quantity, C/O, cases of tax exemption - reduction - refund, type of outsourcing, export manufacturing, export processing, import of goods used to create fixed assets. The department has intensified price management of non-commercial imported vehicles in accordance with regulations of the General Department of Vietnam Customs; inspected and controlled cases of tax exemption and reduction to ensure right and sufficient collection.

To deal with overdue tax, the Import-Export Duty Department has striven to coordinate with customs offices to review, classify, recover and handle overdue tax arising before January 1, 2023 in four categories: Bad debt group, rescheduled debt group; pending debt group, and recoverable debt group. The department has applied appropriate solutions for specific groups of debt by law. The HCM City Customs Department issued Plan 464/KH-HQTPHCM dated February 27, 2023 on strengthening tax debt rescheduling and charge-off for taxpayers who are unable to pay taxes to the State Budget according to Resolution 94/2019/QH14. It also directed units to review bad debts and quickly consider debt settlement by law.

Regarding freight classification, the HCM City Customs Department has synthesized and launched legal documents and instructive documents on HS codes introduced by the General Department of Customs to avoid different codes for a single item to minimize the loss of budget revenue. The agency has regularly reviewed and promptly detected cases where an item is assigned many different codes and informed relevant bodies to make a correction.