July 23, 2019 19:00

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Revenue in the first half of 2019: Downtrend

10:54 | 07/07/2019

VCN- If the increase in the State revenue in January, March and April was from more than 24.35 percent to 34 percent compared to 2018, this revenue in May was 4.89 percent and June was 7.8 percent compared to 2018. This is a downtrend in State revenue collection in the first half of the year of the Customs sector, instead of increasing revenue in the last month of the year, this revenue has gradually decreased.

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Revenue collection in the first half of 2018 and 2019, in billions of VND. Chart: T.B

Import and export turnover was highest

In the first half of 2019, despite the impacts of mechanisms, policies and the US-China trade on the revenue like the reduction in import tax rate under free trade agreements (FTA), especially from the effective date of the CPTPP, with high determination and the implementation of many solutions from the beginning of the year, the Custom revenue reached 175,522 billion VND, 58.4 percent of the estimate and 55.6 percent of the desired target, up by 19.4 percent compared to the same period in 2018.

Customs achieved this revenue due to the total import and export turnover of goods in the first half of 2019 hitting $245.48 billion, the highest level. Notably, export turnover of vegetable and fruit was more than $2 billion. The trade deficit was estimated at $34 million, of which the domestic economic sector had trade deficit of $15.72 billion; FDI sector (including crude oil) had trade surplus of $15.68 billion.

Specifically, export turnover in June 2019 was estimated at $$21.6 billion, reducing by 1.4 percent compared to May. In the second quarter of 2019, the export turnover was estimated at $ 63.86 billion, up 9.3 percent compared to 2018 and up 8.5 percent compared to the first quarter of this year. There were 11 commodities with export value of more than $1 billion in the second quarter, accounting for 73.6 percent of total export turnover. In the first six months of this year, export turnover was estimated at $122.72 billion, up 7.3 percent compared to 2018, of which the domestic economic sector reached $36.82 billion, an increase of 10.8 percent, accounting for 30 percent of the total export turnover. There were 22 commodities with export value of more than $1 billion, accounting for 86.9 percent of total export turnover.

Import turnover in June 2019 was estimated at $21.2 billion, down 8.6 percent compared to May. In the second quarter of 2019, import turnover reached $65.31 billion, up 12.9 percent compared to 2018, increasing 13.7 percent compared to the first quarter. There ưere 15 import commodities valued at over $1 billion, accounting for 72.3 percent of total import turnover.

In the first half of this year, import turnover was estimated at $122.76 billion, up 10.5 percent compared to 2018, of which the domestic economic sector reached $52.54 billion, increased by 14.4 percent; foreign invested sector reached $70.22 billion , increased by 7.8 percent; there were 26 commodities with turnover of over $1 billion, accounting for 84.7 percent of total import turnover.

According to the Import-Export Duty Department of the General Department of Vietnam Customs, the Customs revenue in the first half of the year was higher than the previous year due to the increase in revenue of major commodities such as coal and crude oil, computers, electronic products and components, CBU cars and auto spare parts. In which, the revenue of imported CBU cars and crude oil sharply increased.

CBU car imports in the first five months of the year reached 64.795 thousand units, valued at $1.42 billion, increasing 635 percent in volume and 494.9 percent in value. The revenue collected from this item reached VND 18,747 billion, an increase of VND 15,748 billion, equivalent to an increase of 525.09 percent compared to 2018.

Crude oil imports in the first five months of 2019 reached 3.8 million tonnes, valued at $1.78 billion, up 321.7 percent in volume and 294.8 percent in value, the revenue collected from this item reached VND 4.297 billion, increasing by VND 3,288 billion, equivalent to an increase of 326 percent compared to 2018. Revenue from these two items reached VND 23,044 billion, an increase of VND 19,037 billion (equivalent to 475 percent) compared to 2018.

Achievements and challenges

Despite the increase in revenue, if the revenue of January, March and April 2019 was 24.35 percent - 34 percent compared to 2018, the revenue in May was 4.89 percent and June of 7.8 percent compared to 2018. This is a downtrend compared to previous years when the increase in revenue was higher in the last months of the year. From this situation, the revenue in the second half will not be as high as in the first half of the year.

According to the leader of the Import and Export Duty Department, the increase in revenue was mainly from imported CBU cars. The revenue was unstable due to the problems of Decree 116/2017/ND-CP, when these problems were removed, enterprises imported massively from September 2018, leading to the sharp increase in revenue. However, at present, the total number of imported CBU cars has gradually decreased due to stable demand.

Especially in the context of the world economic situation in the second half of 2019 is forecast to continue with the growth momentum, but there are many challenges and difficulties due to the reduction in import and export tax rate under trade deals, especially from the effective date of CPTPP since January 14, greatly affecting the State budget collection and the revenues are expected to decline sharply.

The reducted revenue affected by FTAs ​​in 2019 was about VND 13,820 billion. According to the provisions of Decree 125/2017/ND-CP, from January 1, 2018, some commodity lines of imported auto parts will be enjoyed the preferential tax rate of 0 percent, and the tax refund amount for these commodity lines was estimated at VND 6,000 billion, of which VND 4,000 billion will be refunded in 2019 and 2,000 billion in 2020.

With the above situation, the expected State budget revenue in 2019 from import and export activities is VND 312,230 billion. The leaders of the General Department of Vietnam Customs said they will make efforts in performing State budget collection to reach the target of VND 315,500 billion.

To achieve this, the Customs sector needs to put more effort into managing the State budget collection and creating favourable conditions for businesses. In particular, municipal and provincial customs departments need to monitor and follow the actual situation, especially the revenue sources and collection bases, ensuring to provide solutions suitable to the characteristics of each area.

Closely following and implementing solutions to collect State budget issued by the General Department of Vietnam Customs in Directive 723/CT-TCHQ on January 30, 2019 such as: Strengthening customs management and promptly discovering acts of smuggling and trade fraud causing losses of State budget revenues.

Focusing on price and reviewing the list of price management on price to identify suspicious signs, conducting price ruling and post-clearance inspection effectively; classifying and applying tax rates to prevent unified classification.

Reviewing and inspecting tax exemption cases, especially cases of tax exemption for investment preferential projects, due to differences in investment preference policies between the Law on Import Export Tax No. 45 and the Law on Import and Export Tax No. 107; focus on analysing and assessing post-clearance risk for goods of Green channel to implement post-clearance inspection or specialised inspection to promptly alert in customs clearance, prevent errors; collecting recoverable tax debts, prevent arising debt, especially with debts after inspection and post-clearance inspection; handling debts and problems in inspection.

The revenues of customs departments in the first half of 2019 was higher than previous years: Ho Chi Minh City Customs Department collected 49.313 trillion VND, reaching 53.61 percent of the estimate; Hai Phong Customs Department collected 23.91 trillion VND, reaching 74,84 percent of the estimate; Ha Noi Customs Department collected 9.887 trillion VND, reaching 50.29 percent of the estimate; Dong Nai Customs Department collected 9.003 trillion VND, reaching 52.78 percent of the estimate; Khanh Hoa Customs Department collected 5.672 trillion VND, reaching 212 percent of the estimate.

By Thu Trang/Ngoc Loan