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VAMA cries fraud, GDC issues revisions
Car importers face increases in taxable prices by 3-20 percent, as stipulated in the risk management list issued by the General Department of Customs (GDC). The list seemed to satisfy the Vietnam Automobile Manufacturers’ Association (VAMA), which charged that widespread import frauds required ministry-level investigations.
Under the revised risk management list, all new and used car imports will be subject to higher minimum taxable prices, some increasing by several thousand dollars. More than 600 car models are affected, including automobiles from Bentley, BMW, Cadillac, Chrysler and Hummer, Land Rover, Lexus, Lincoln, Mercedes and Toyota.
For instance, the 2009 seven-seat 3.664L Acura MDX will have a minimum taxable price of $37,000, rising from $33,000 for cars made in 2008 and $31,000 for those made in 2007. Similarly, the 2009 four-seat 4.2L Audi A8 will have a taxable price of $60,000 and the 2008 seven-seat 4.2L Audi Q7 made in Slovakia will be $50,000.
The decision on raising the minimum taxable price has been announced just one week after VAMA officially requested ministries to crack down on tax fraud in a letter that accused car importers of falsely declaring low import and sale prices to evade taxes.
The GDC’s ruling has been described as VAMA “gaining the upper hand” over car importers.
Car importers have denied any tax fraud and point out that customs agencies prevent car importers from declaring low taxable prices just to evade taxes. In response to VAMA’s condemnation, car importers accused domestic automobile manufacturers of enjoying tax incentives and yet still setting high sale prices.
A car importer in HCM City has warned that higher taxable prices mean higher car prices. “Consumers will suffer most from the GDC decision,” he commented, adding that the taxable price list may violate WTO regulations.
Under WTO rules, taxable prices are the actual prices in transaction contracts, not prices set by government agencies.
However, the GDC, responding to questions by VnExpress, affirmed that the price risk management list serves as a reference database to help the GDC identify tax fraud.
The customs agency said that the database has been built on the WTO/GATT Customs Valuation Agreement that Vietnam committed to follow when it joined the World Trade Organisation.
A high-ranking GDC official denied any link between the issuance of the risk management list and VAMA’s request, stating that the new list has been updated as part of regular activities.
Regarding VAMA’s charge that many car importers are tax evaders, the official supposed that this might be true in some cases, but remarked that dodging taxes is not an easy task for importers.
VietNamNet, VNE
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