Smuggling iron ore, loss of 1,700 billion VND/year

A study shows that the actual export volume of raw minerals from Vietnam to China far exceeds all statistics from Vietnam's customs, causing Vietnam to lose over VND3,560 billion in tax revenue in 2011 and 2012.



When asked by the Deputy Prime Minister to report, the Ministry of Industry and Trade could not deny this information...

Two years lost more than 3,000 billion VND

According to a report sent to Deputy Prime Minister Hoang Trung Hai, the research team of the Vietnam Steel Association (VSA) said that there is a large difference in the volume of iron ore exported from Vietnam to China according to the data released by Chinese customs in 2011. According to the data released by Chinese customs in 2011, China imported 2.8 million tons of iron ore from Vietnam at a price of 106 USD/ton.

Meanwhile, the “Report on iron ore exports to China” by Vietnam Customs said that in 2011, Vietnam only exported 1.3 million tons of iron ore to China at an average price of only 52 USD/ton, less than 1.5 million tons and the price was also 54 USD/ton lower than the data from China.

In 2012, the gap between China and Vietnam's figures was even wider. According to the report, Vietnam recorded only 23,600 tons of iron ore exported to China, while China said it imported 1.74 million tons from Vietnam, a difference of over 1.7 million tons. There was also a big gap in prices. While Vietnam imposed an export tax of 46 USD/ton, China said the import price from Vietnam was up to 92 USD/ton.

From this difference, the research team believes that there are two major problems with iron ore exports. First, the amount of smuggled ore is very large, from 1.5 to 1.7 million tons/year. Second, the export price declared by Vietnamese exporters to customs is much lower than the actual export price to China, causing the budget to "lose huge revenue".

In the two years 2011-2012 alone, according to this report, Vietnam lost about 1,700 billion VND in tax revenue each year due to not being able to control the amount of iron ore actually exported. Furthermore, with the low price for the declared amount of iron ore, in 2011 alone, Vietnam lost nearly 600 billion VND in tax revenue.

Ministry of Industry and Trade said there are no conditions to inspect

Naming major ore smuggling locations such as Viet Tri port (Phu Tho), Hai Duong, Hai Phong, Quang Ninh with “tens of thousands of trucks, thousands of ships, boats, and barges of all sizes”..., the report recommended that authorities strengthen control, prevent resource drain, and promptly apply minimum tax rates for iron ore exports. Speaking to Tuoi Tre, Mr. Pham Chi Cuong, chairman of VSA, affirmed that the report had been seriously implemented and that he would take responsibility when sending the report to the Prime Minister.

After receiving the report from VSA, Deputy Prime Minister Hoang Trung Hai requested the Ministry of Industry and Trade to investigate, clarify, propose solutions, and report to the Prime Minister. However, in the report just sent to the Prime Minister, the Ministry of Industry and Trade stated that the quantity and price of iron ore imported from Vietnam according to statistics from China, the Ministry "has not had the conditions to check, so there is no basis to determine the authenticity of the above information".

The Ministry of Industry and Trade also said that at a meeting on this issue organized by the ministry on June 13, a representative of the General Department of Customs affirmed that Vietnamese and Chinese customs do not have an agreement on information exchange, so this agency does not have the conditions to check the authenticity of Chinese customs statistics...

Too many reasons

However, in a report to the Prime Minister, the Ministry of Industry and Trade admitted that in reality, "there is a discrepancy in the quantity and export price of iron ore between Vietnamese and Chinese customs". And according to this ministry, the reason is that China stipulates that iron ore includes slag and tailings containing iron; not to mention some cases of export from Vietnam to China through temporary import for re-export and finally smuggling...

Explaining the huge price difference between Vietnamese and Chinese customs, the Ministry of Industry and Trade said that according to current regulations, the price for calculating export tax is based on the sales contract, which is self-declared and self-responsible by the enterprise. Furthermore, because there is no unified price list for calculating tax on minerals nationwide, Vietnamese enterprises can declare lower prices than the actual price to reduce taxes. However, customs must still clear customs, and if post-inspection discovers fraud in the declaration, they will collect and impose penalties according to regulations.

In addition, according to the Ministry of Industry and Trade, it is not excluded that Chinese enterprises declare higher prices to increase costs, reduce corporate income tax and receive support and incentives from the government when importing minerals from abroad (China has a policy of encouraging and supporting the import of minerals).

Also according to the report, the Ministry of Industry and Trade proposed that the Prime Minister direct the Ministry of Finance to urgently review the process and procedures for exporting minerals, and take effective measures to strictly manage the quantity and price of exported minerals...

Vietnam's tax loss in 2011 and 2012

(due to the difference in quantity and price between Vietnam and China customs)

According to Tuoi Tre - PH