VCN- With the tariff reduction roadmap and the tariff reduction due to the implementation of commitments under the FTAs in 2018, the Customs sector’s revenues will reduce about VND 30,150 billion. It is expected that in the coming time, the FTAs will have a great impact on the the Customs sector’s revenues.
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|Customs officers of Thai Nguyen Customs Branch, Bac Ninh Customs Department implement physical inspection for imported goods. Photo: T.Tr|
Revenues from petroleum product imports reduced by VND 2,000 billion
According to the calculation from the General Department of Vietnam Customs, the imports and exports in the first 4 months of 2018 showed that the State revenue from imports and exports reduced about VND 7,800 billion due to the implementation of the tariff reduction roadmap. In which, the reduced revenue from the petroleum product imports was the largest. In the first 4 months of 2018 the Customs sector implemented tax refunds of VND 550 billion for enterprises that submitted the C/O. It is expected that the Customs sector must refund about VND 1,500 billion. Therefore, the revenue from the petroleum product imports reduced by VND 2,050 billion. In the first 4 months of 2018, the revenues from CBU car imports reduced by VND 1,350 billion; revenues from iron and steel decreased about VND 60 billion; revenues from animal and vegetable fats and oils reduced by VND 80 billion.
So far, 12 FTAs have been signed, including the CPTPP which was officially signed in March 2018.
According to Kyodo, ministries of 16 Asia-Pacific countries who participate in the negotiations on Regional Comprehensive Economic Partnership (RCEP), will meet in Tokyo on 1st June 2018.
This meeting will be the first time a country outside the Association of Southeast Asian Nations (ASEAN) will host a ministerial meeting to negotiate on the RCEP. The RCEP is a free trade agreement that includes 10 ASEAN economies and 6 dialogue partners, they are; Australia, China, India, Japan, South Korea and New Zealand. The RCEP negotiations were launched in November 2012. After being signed, the largest trading block in the world will be established, accounting for 50% of the world's population and 39% of global gross domestic product. Thereby, the RCEP has the potential to play a leading role in global growth.
In addition, the two new-generation FTAs which are CPTTP and FTA with the EU, are expected to impact on the reduction of the State revenues in 2 directions. The first, these FTAs require conditions higher than the other FTAs on import duty elimination up to 100% and FTA with the EU with the expected rate of import duty elimination of over 90%.
These FTAs require the elimination of export duty because they consider this as the indirect subsidy for domestic production and the export duty helps domestic production to buy raw materials at a cheaper prices compared to the world market. Thus, it is expected the these two FTAs will have greater impact than the other FTAs.
But considering carefully, it can be seen that among the countries that Vietnam is negotiating with on TPP, Vietnam has had FTA relationships with 7 countries, including Singapore, Malaysia, Russia, Chile, Japan, Australia and New Zealand. The import duty reduction under TPP with these countries is just a step to supplement import duty rates signed in FTAs. Therefore, the additional impact on the revenue from imports from these countries will not be significant. With the remaining 4 countries, the impact from import and export duties is not significant.
Continue to provide synchronous solutions to prevent tax losses
The implementation of FTA commitments aims to attract and contribute to increase foreign investment and reduce input costs for domestic enterprises, promote business production and import and export turnover. However, this also leads to the reduction in the State revenue from import duty. Thus, from the beginning of the year, the GDVC requested units to actively evaluate the impact of FTAs on the State revenue, drastically direct and urge and strengthen to review and control revenues; study, propose and provide solutions to increase revenue and prevent tax losses. Including, reviewing and grasping the tax debt, classify debt groups and evaluate in detail each enterprise, and the tax debt situation of enterprises, give reasons and provide handling method in accordance with regulations. Drastically handling, enforcing and recovering tax debt, reducing outstanding tax debt, not raising new tax debt and to not incur the occurrence of tax debt during the new period higher than the previous period.
|Impact of FTAs in 2018
VCN- According to calculations by the General Department of Customs, with the tariff reduction schedule, the reduction ...
Along with that, continuously implementing administrative reform and creating favorable conditions for importers and exporters. Collaborating with ministries and sectors to deploy the National Single Window, reducing clearance and release times that are equal to the average level of ASEAN-4 countries under Resolution No. 19-2017/NQ-CP. On the other hand, implementing effectively Decree 36a/ND-CP, setting the target to provide e-Tax payment service at level 4. The GDVC signed coordination agreements with 38 banks on e-tax payment and 5 banks on piloting of e-tax payment and Customs clearance 24/7/
As of the end of April 2018, the Customs sector’s revenues reached VND 90,565 billion, accounting for 31.78 % of the estimate, equivalent to 30.9% of the desired target, a decrease of 2.35% compared to the same period in 2017 (92,741 billion VND).
As of 20th May 2018, the Customs sector’s revenues reached VND 108,899 billion, accounting for 38.48% of the estimate, equivalent to 37.17% of the desired target.
The commodity which has the greatest impact on the Customs sector’s revenue in the first 4 months of 2018 is CBU automobiles. Due to the impact of Decree 116/2017/ND-CP stipulating conditions for manufacturing, assembly, import and business of automobile warranty and maintenance services, effective on 1st January 2018, the revenue from this commodity also reduced. In the first 4 months of 2018, the turnover of CBU automobiles reached 6.7 thousand units, valued at US$ 174.7 million, a decrease of 79.9% in volume and 72.3% in value compared to the same period in 2017. The receivable tax reached VND 2,027 billion, decreasing VND 9,273 billion compared to the same period in 2017 (including the reduced revenue from automobiles less than 9 seats was VND 7,279 billion).
By Kim Ha/Ngoc Loan