Vietnam has failed to collect a huge amount of export taxes as millions of tons of iron ore have been illicitly exported to China over the last two years, the Vietnam Steel Association (VSA) said in a report recently submitted to Deputy Prime Minister Hoang Trung Hai.

“There is a disparity over the amounts of iron ore exported to China between the customs agencies of the two countries, which resulted in a VND3.56 trillion (US$169.24 million) budget loss in 2011 – 2012,” the VSA report stated.

According to a report released by Chinese customs in 2011, China imported 2.8 million tons of iron ore from Vietnam at $106 a ton that year.

However, a similar report by Vietnamese customs said the country exported only 1.3 million tons of ore to China, and also at lower price, only $52 a ton.

This means a difference of 1.3 million tons in volume, and $54 a ton in value, the VSA report said.

The disparity even grew bigger in 2012, with China claiming they imported 1.74 million tons, while the Vietnamese side said the total export volume was only 23,600 tons. Vietnam said the export price was $46 a ton, while China reported an import price double that rate, $92 a ton.

“Studies on the export volume and value show that there may be 1.5 - 1.7 million tons of iron ore exported to China without the management of local customs,” the report said.

“Moreover, the different prices stated by the two sides also mean that the national treasury has lost a large sum of taxes.”

The annual damage was worth VND1.7 trillion between 2011 and 2012, and the loss coming from the low export price was estimated at $600 billion in 2011 alone, VSA said.

‘Cannot check’

In the conclusion of the report, the VSA urged that relevant agencies and ministries strengthen their management and look into the case to stop the phenomenon.

“The VSA report was carefully and appropriately conducted, and I’m responsible for delivering it to the Prime Minister,” VSA chairman Pham Chi Cuong told Tuoi Tre.

Upon receiving the report, Deputy Prime Minister Hoang Trung Hai ordered the Ministry of Industry and Trade to review and report the phenomenon.

In response, the ministry said it not yet been able to check if the statistics released by the Chinese side are accurate.

“We do not have the conditions to check the statistics as Vietnam and China have not reached any agreement on customs information exchange,” a ministry representative said at a press briefing on June 13.