HCM City Customs Department recently detected many shipments of processed goods and export production that evaded a large amount of tax, collected billions of dong to the State budget, and at the same time gave many warnings and notices to businesses.

HCM City Customs officials inspected imported raw materials. Photo: T.H

Collecting billions of tax arrears

Recently, by checking the finalisation report of delivery-receiving-inventory of raw materials, import materials and export products by type of processing of M Joint Stock Company (address at Di An, Binh Duong), the Investment Customs Branch - HCM City Customs Department discovered this enterprise violated regulations on the management of raw materials for export production, resulting in an insufficient inventory of goods compared to accounting vouchers and the accounting books and customs dossier for export or import goods not in cases specified at Points d, đ, e and g, Clause 1, Article 14 of Decree 128/2020/ND-CP dated October 19, 2020.

From the above fraud, the amount of tax evasion that had to be paid to State budget was more than VND 1.2 billion. At the same time, violations of regulations on making finalisation reports on the quantity of imported raw materials, supplies and components for export production that are incorrect with the actual amount of goods of use, resulting in a shortage of payable tax amount of more than VND 28 million. Besides collecting the full amount of tax arrears, the customs authority sanctioned this enterprise nearly VND 250 million for its violation.

In January 2021, an enterprise was sanctioned and collected more than VND 4.5 billion by HCM City Customs for violation of regulations on the management of raw materials for export production, leading to a shortage in the actual inventory compared with accounting documents, customs dossiers. High-Tech Park Customs Branch – HCM City Customs Department conducted an inspection on the performance of export production contracts for electronic components of B Technology Manufacturing and Service Co., Ltd. (address at Thu Duc City - HCM City). The unit discovered this company violated law on customs. Specifically, the firm violated the regulations on the management of raw materials, serving for export production, resulting in a shortage in the actual inventory compared to accounting books and customs dossiers, resulting in a lack of payable tax with the total amount of more than VND 4.1 billion. Through reviewing the documents and explanations of the enterprise, the High-Tech Park Customs Branch collected the tax arrears and issued a decision on a monetary penalty that was equal to 10% of the understated tax amount for the firm due to the above violation, with an amount of monetary penalty more than VND 412 million. Total fine and tax arrears collection of more than VND 4.5 billion.

Not only violating the performance of processing and export production contracts, via reviewing, HCM City Customs Department also discovered several cases of incorrectly declaring codes and tariff rates for imported goods.

In February 2021, the Processing Customs Branch made a record of administrative violations for P. Vietnam Co., Ltd. for the act of "Incorrect declaration of code, tariff rate of goods, resulting in a lack of payable tax amount”. The Customs authority discovered the mistakes of this enterprise when reviewing the declarations already cleared. However, the firm voluntarily made an additional declaration and fully paid payable tax amount before the time for making the violation record. The value of infringing goods was more than VND 15 billion. In the process of verifying the details of the case and considering the explanation, the Processing Customs Branch sanctioned this company 20% of the understated tax amount (over VND 1.7 billion) with a total fine of more than VND 342 million.

Giving a lot of warnings

From the above fact, to comply with the law, the HCM City Customs Department has given many notes and warnings to businesses to comply with regulations. In particular, it is suggested that import-export firms strictly manage their digital signatures to avoid being taken advantage of, affecting the rights and interests of enterprises. At the same time, they should be choosing and using credible customs broker services and have experience in declaration, such as customs brokers certified by the General Department of Vietnam Customs.

At the same time, customs branches also pay attention to firms, to avoid violations caused by foreign partners voluntarily sending incorrect goods compared to the contracts, companies need to discuss carefully with partners before signing contracts on goods management policies so as not to accidentally get involved in violations of used machinery and equipment, means of transport that are not allowed to circulate. If the enterprise intentionally violates this with a value of VND 200 million or more, they will be prosecuted with criminal liability in accordance with article 188 of the Penal Code.

In addition, several violations of regulations on tax declaration, including failure to declare or incorrectly declare the name, type, quantity, quality, value, origin and code of the goods. In the most violation rate is an incorrect declaration of goods codes, the firm needs to remedy by implementing Article 28 of the Customs Law on pre-determination of code, origin and valuation.

The Processing Customs Branch has noted enterprises many important points in announcing production facilities and storage places of goods in accordance with the provisions of Circular 39/2018/TT-BTC dated April 20, 2018 of the Ministry of Finance to avoid being sanctioned for violating regulations.

In fact, through inspection and review by the Processing Customs Branch, many processing firms have not notified the information of production base on the electronic data processing system of the customs authority in accordance with regulations. Besides that, many enterprises have not submitted annual finalisation reports yet despite being reminded many times. The Customs authority is verifying the operation of enterprises in accordance with regulations.