Why has import and export tax revenue decreased?

(Baonghean) - In the first eight months of 2016, state budget revenue from key items collected by the Nghe An Customs Department remained relatively stable. However, the collection progress for some items only reached a very small portion, affecting the province's import and export tax collection plan.

According to the Nghe An Customs Department, in 2016, the Ministry of Finance assigned a revenue target of 970 million VND from import and export activities, while the General Department of Customs set a target of 1,000 billion VND. Meanwhile, the People's Committee of Nghe An province set a target of over 1,200 billion VND, a 26% increase compared to the previous year's actual revenue of only 1,007.6 billion VND. As of the end of August 2016, the Nghe An Customs Department had collected over 528.5 billion VND for the state budget, achieving over 54% of the assigned target (970 billion VND) and 41.6% of the mandated target (1,270 billion VND), a decrease of 11.1% compared to the same period in 2015.

Loading and unloading goods at Cua Lo port.

According to Nguyen Van Khanh, Head of the Operations Department of the Nghe An Customs Department: Most import and export items that primarily generate revenue, such as aluminum coils, wood, plastic pellets, electronic components, asphalt, vegetable oil, breeding cattle, beef cattle, and petroleum products, have seen a sharp decline. The collection progress for some items has only reached a very small fraction, or even failed to meet the assigned targets. Specifically: For petroleum products, the initial estimate projected tax revenue from imported petroleum in 2016 to be over 250 billion VND. However, to date, the amount of imported petroleum has only reached 14,173 tons, a decrease of 45.2% compared to the same period in 2015, equivalent to a tax revenue of over 59 billion VND, achieving only 23.2% of the estimate and a decrease of over 65% compared to the same period in 2015.

The annual budget revenue of the Nghe An Customs Department depends heavily on taxes collected from petroleum products. However, world oil prices have decreased since the end of 2014, falling sharply in 2015 and continuing into the first six months of 2016. Furthermore, in the first six months of 2016, the Vietnam National Petroleum Corporation did not allocate import quotas for the Nghe An Petroleum Company to import through ports in the province. This has significantly impacted the unit's state budget revenue.

Next is imported timber. Annually, timber imported from Laos contributes approximately 100 billion VND to the unit's budget revenue. From the end of 2015 to the present, import and export activities at border gates in the area have been very limited. In particular, during the past period, the Thanh Thuy Border Gate Customs Sub-department has not recorded any timber imports.

At the Nam Can International Border Gate Customs Sub-department and other sub-border gates and crossings, state budget revenue from timber exports only reached over 23 billion VND, achieving just over 19% of the initial target (120.5 billion VND) and decreasing by more than 63%. The main reason for this decrease is Laos' change in policy, tightening management of timber exports and only allowing the export of processed timber. Along with this, several other items such as electronic components, imported asphalt, and exported white limestone also saw significant declines.

Furthermore, some goods enjoy special preferential tax rates due to their Certificate of Origin (C/O) from countries that have signed trade agreements, such as aluminum coils and beef imported from Australia. According to the 2016 budget, the tax revenue from aluminum coils was projected at 39 billion VND, and from beef and breeding cattle at over 58 billion VND. To date, only over 2.9 billion VND in tax has been paid to the state budget for aluminum coils. In addition, beef and breeding cattle are imported through the Vung Ang deep-water port in Ha Tinh province because the Cua Lo port does not meet the requirements for ship turnaround, leading to a decrease in budget revenue…

Operational activities of officers at the Cua Lo Port Customs Sub-Department.

In light of these difficulties, according to Chu Quang Luan, Director of the Nghe An Customs Department, to achieve the state budget revenue target, the Nghe An Customs Department has developed detailed monthly and quarterly plans, organized meetings to support and promptly resolve difficulties and obstacles for businesses; researched solutions to overcome difficulties suitable for each business; and provided timely and effective support to businesses in paying taxes.

Minh Thu