Dairy firms protest customs' demand for $43.84 mln in back taxes

By Quang Thuan, Thanh Nien News

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Dairy producers and importers in Vietnam are ordered to pay tens of millions of dollars in back taxes over an imported milk ingredient. Photo: Reuters Dairy producers and importers in Vietnam are ordered to pay tens of millions of dollars in back taxes over an imported milk ingredient. Photo: Reuters
Customs said importers declared a product in the wrong category and paid less taxes than they were supposed to


Eight dairy producers and importers in Vietnam have sought the government's help, claiming that they are unfairly asked by customs to pay around VND1 trillion (US$43.84 million) in back taxes.
In a letter sent to the Prime Minister and the Ministry of Finance this week, the businesses, including giant Vinamilk and Dutch-owned FrieslandCampina, said they have been subjected to a "wrongful" decision by the General Department of Vietnam Customs. 
They said the department has accused them of making incorrect customs declarations on anhydrous milk fat imports 
The businesses said they have imported the product from New Zealand-owned dairy company Fonterra since 2000. Over the years, they have declared it as anhydrous butter fat, which is subject to a 5 percent tariff.
Under Vietnam's existing laws, any oil and fat products from milk other than anhydrous butter fat, butter oil and ghee is taxed at 15 percent when imported. 
Based on that rule, customs ordered its local offices to collect the back taxes from the businesses, totaling VND1 trillion and dated back to 2010. 
Same or different?
The businesses argued that despite different names, anhydrous butter fat and anhydrous milk fat are the same product with similar contents, citing different scientific documents released by local and international organizations.
However, an official of the customs department insisted that they are two different products, Vietnam News Agency reported on Wednesday.
The official admitted that customs officers had failed to detect the problem for years. He added that the total amount of tax dues is actually VND700 billion ($30.69 million).
Local government and state agencies are supposed to collect VND70 trillion ($3.06 billion) in back taxes by the end of the year as ordered by Prime Minister Nguyen Tan Dung at a meeting last week.
The order came as the government is expected to fall short of its revenue target by at least VND31.3 trillion ($1.36 billion), due to a sharp decline in crude oil prices.
In the past few months, government agencies often publicly slammed local businesses for failing to pay taxes, blaming them for the state budget's problems.
Since July, tax offices around the country have released the names of their top tax defaulters, mostly businesses, to shame them into making payments.
Figures released by the General Department of Taxation this week showed that the name-and-shame policy has helped fetch about 17.9 percent of VND11.72 trillion ($512.76 million) owed by 563 top defaulters. 

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