Export processing businesses are feeling the pinch with a new customs draft circular.
Under current regulations, export processing businesses are subject to customs check-ups when the customs bodies are doubtful of their addresses, operational or managerial capacity in handling contracts.
However, much more businesses will incur customs checks under the new draft circular guiding customs procedures towards products made under export processing contracts. Some of them are those for the first time getting involved in export processing, businesses that outsource their export processing contracts in whole or in part and businesses importing materials but not having products for export several months later.
Accordingly, businesses must show papers certifying their legal ownership and usage of the workspace, machinery and equipment at the workplace. The customs bodies may also check firms’ human resources capacity relevant to the processing contracts’ implementation.
The draft circular has shocked footwear, textile and garment firms since they have to import up to 70-80 per cent of production materials.
“I felt uneasy after reading the draft circular as it has too many regulations,” said Vietnam Textile and Apparel Association general secretary Dang Phuong Dung.
A Hanoi-based footwear firm representative said many regulations in the new draft circular were unnecessary. He argued that to get business registration licences and tax codes businesses must prove their capacity with the tax, planning and investment authorities, so that the General Department of Customs (GDC) has no need to do the same thing.
GDC deputy head Vu Ngoc Anh said the customs authorities would consider enterprises’ comments before making the circular known to public.
Anyhow, the customs sector gave a warning that tightening management of export processing was of great importance because in reality a great many businesses active in export processing had abused state tax incentives for tax evasion.