Identifying mistakes in verification results after clearing goods one month, Customs re-determined tax payable of VND 2.5 billion higher than the previous paid tax but the importer delayed paying the missing tax amount, making things difficult for Customs.

Officials from Cai Mep border gate Customs Branch inspect import-export goods.
Photo: N.H

Difficult in collecting the missing tax amount

Cai Mep border gate Customs Branch (Ba Ria-Vung Tau Customs Department) said on August 17, 2019, Foxi Food Company Co., Ltd (headquartered at Nam Dinh) opened an import declaration for a car as non-commercial goods. Declared by the company, the imported car was a Land Rover Range Rover Vogue L 5-seat car, manufactured in 2019, new car, left hand drive, gasoline engine, two bridges, SUV model, automatic transmission. Goods imported under permits granted by the Ha Nam Ninh Customs Department.

The above Land Rover car had trade name Range Rover Vogue L, Cai Mep Customs inspected the car and valued it US$95,600 (about VND 2.2 billion) and imposed a tax payable of VND5.3 billion and conducted customs clearance on September 8, 2019.

However, a month later on October 14, 2019, Cai Mep customs received an official dispatch from Vietnam Registry Department revoking the granted certificate of quality, technical safety and environmental protection for the imported car and granted a new certificate for that car with the trade name Range Rover Autobiography L.

To have grounds to check and re-determine taxable value for the car, Cai Mep customs on October 14, 2019 sent a dispatch to Foxi Food Co, Ltd revoking the import permit and on October 21, 2019 sent an official dispatch to Ha Nam Ninh Customs Department to correct the import permit.

On December17, 2019, Cai Mep customs received a dispatch from Ha Nam Ninh Customs Department on amendments to the import permits for the car. Cai Mep customs has repeatedly contacted with Foxi Food company to deal with issues related to customs valuation for the car. On February 26, 2020, Cai Mep customs re-determined customs value for the car of US$140,974 and sent a notice of this re-valuation to the company.

On March 12, 2020, the firm made additional declaration for new value. The tax payable was VND7.8 billion, VND2.5 billion higher than the previously paid tax. The company promised to fulfil the missing tax amount. Yet, so far, the company has paid only VND400 million.

The mistake in the registration results makes the Customs agency struggle to adjust and collect the missing tax amount.

Small mistake, huge loss of revenue

After many contacts, the company had not paid the missing tax, so on January 21, 2021, Cai Mep Customs Branch sent another notice of tax arrears and late payment interests to Foxi Food company but did not receive feedback.

Therefore, in July 2021, Cai Mep Customs issued a coercive decision by stopping customs procedures for imports and exports of Foxi Food. This decision is valid for one year since the date of issuing and invalid as the tax arrears is paid sufficiently.

According to the reporter, Foxi Food Company specialises in restaurants, cafeteria, food service; fast-food restaurant chain and takeaway stores. With this business type, the operation of the firm has not engaged to import and export activities.

A Cai Mep Customs Official said in addition to the import declaration of the car, Foxi Food Company has never had any import-export activities at the unit. The coercive decision on stopping customs procedures for import and export goods of Cai Mep customs will not put pressure on the firm. Therefore, the collection of the tax arrears is very difficult.

The customs official also said this is the first time that such the mistake has occurred in the inspection work. This unfortunate incident is a lesson for specialised agencies in the inspection and certification of imported and exported goods. Even a small mistake can lead to a huge loss of revenue for the State budget.