VCN – To implement risk management, in addition to facilitating trade in customs clearance, the Ho Chi Minh City Customs Department has attached importance to analysing and identifying key points, exposing measures and tricks of tax fraud from green-channel declarations.
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|Export waste shipment with tax fraud of more than half of a billion dong was discovered on November 2, 2019. Photo:T.H|
Fraud of combined taxes
The shipment of four containers weighed nearly 100 tonnes of aluminum waste was seized by the Customs Branch at Sai Gon port zone 1, which shows the tax fraud from exports especially waste is sophisticated and growing. On customs declarations, the exporter declared goods as galvanised round steel pipe subject to export tax rate of zero percent. The shipment was classified automatically into green channel (exempt from physical inspection). From collecting information, the Customs control and supervision unit detected fraudulent signs from this shipment so proposed the branch’s leaders make a decision on stopping the clearance and changing it into the physical inspection. As a result, the Customs unit identified the goods as aluminum shell waste subject to export tax rate of 22 percent. Thus, the exporter committed a fraudulent act of more than a half of a billion tax.
According to Nguyen Thanh Long, Vice Manager of the Customs Branch at Sai Gon Port zone 1, if the shipment was successfully exported, the exporter would have gotten a tax refund at a local tax agency. Meanwhile, the exporters failed to export the above shipment but illegally exported four containers of aluminum waste subject to export tax of 22 percent. If the Customs agency did not prevent the case in a timely fashion, the exporter would deceive compound taxes (VAT and export tax), causing big losses to the State budget.
Earlier, the Northern Anti-smuggling Enforcement Unit (Unit 3) - under the Anti-smuggling and Investigation Department of the General Department of Customs in coordination with the Customs Branch at Sai Gon port zone 1 discovered the case of illegally exporting five containers of waste of Duc Minh Development and Import, Export Company Limited for tax fraud. The company declared the exported goods as terracotta potteries subject to tax of zero percent, classified into green channel. By inspecting the shipment, customs detected the above five containers containing aluminum waste subject to export tax of 25 percent. The fraudulent tax was estimated into the hundreds of millions of dong.
Recently, Customs agencies have discovered many suspicious export shipments and changed them into physical inspections, exposing enterprises committing tax evasion. These enterprises took advantages of risk management mechanisms and intentionally misrepresented the name, type, volume, value, code and tax rate of goods with the aim of concealing the real goods and evading tax.
Inspecting green channel declarations
To conduct risk management, in addition to facilitating trade in clearance, the Ho Chi Minh City Customs Department has attached importance to analysis and identification of key points, exposing many methods and tricks of tax fraud from green channel declarations. Besides export goods, many imported shipments subject to green channel with signs of fraud were forced to stop clearance and be inspected. On August 28, 2019, the Customs Supervision and Control Team under the Customs Branch at Saigon Port Area 1 detected suspicious signs of misrepresentation of goods code for the shipment of Tai Phu Plastic Co., Ltd. The goods were declared as mat paper used to pack fruit with fruits, new 100 percent, made in Taiwan and subject to preferential import tax rate of 5 percent and VAT rate of 10 percent.
However, physical inspection results showed imported goods were paper bags of fruits, new 100 percent, made in Taiwan and subject to preferential import tax rate of 20 percent, VAT rate of 10 percent, the tax amount increased by nearly VND 160 million. In addition, the Customs Branch changed into post-clearance audit for more than 20 former import customs declarations of similar goods of this company.
Previously, the Customs Branch issued a decision fining Tran Linh Trade and Services Co., Ltd. VND 258.3 million, collecting more than VND 1.3 billion of fraudulent taxes from imported goods subject to green channel declaration.
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According to Ho Chi Minh City Customs Department, with the high percentage of green channel declarations, the unit has focused on analysing risk management, clearly identifying risk signs of enterprises, green channel and yellow channel declarations at high risk to apply timely and appropriated measures.
|In September and October 2019, the Ho Chi Minh City Customs Department issued two decisions to prosecute criminal charges of "smuggling" related to the tax evasion from exported waste of La Ebi Lohas Company (Binh Chanh - Ho Chi Minh City). This company moved from Ho Chi Minh City to Binh Phuoc to open two export declarations of copper and aluminum waste. Although the declaration was classified into green channel, but through the management, Ho Chi Minh City Customs Department has temporarily stopped customs clearance and conducted physical inspection, identifying goods subject to misrepresentation and tax fraud of nearly VND 1 billion.|
By Le Thu/ Huyen Trang