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Tax arrears to be imposed on fraudulent sellers

Tax arrears to be imposed on fraudulent sellers

Sunday, December 09, 2012, 17:00 GMT+7

The taxation agencies of Hanoi and Ho Chi Minh City will impose tax arrears for the sellers of fake goods with signs of tax evasion, said a senior official of General Department of Taxation of Vietnam.

Bui Van Nam, general director of the department, told Tuoi Tre that initial reports showed that goods sold in those major stores are mostly fake branded goods.

If the sellers of those goods there don’t have any papers showing their origins, official receipts, tax identification number, they will be receive the penalties, Nam said.

The taxation agencies will also work with local banks to check the transactions carried out via bank accounts of those shops.

“It will help recover the money lost via tax fraud conducted by bank card payment.”

The battle against fake goods

Bui Thai Quang, deputy head of the risk management team of General Department of Vietnam Customs, said that there are thousands of shops selling high-value imported goods including garments and electrical stuffs in Vietnam.

However, when imported into Vietnam, the customs authorities do not have enough capacity to monitor and inspect into the true origins and the correct values of all the import shipments.

The customs agencies sometimes just have time for assessing the quality of imported goods and checking if they contain any toxic substances.

Through the initial information, it is clear that Milano store had declared that their goods were imported from China, not from Italy, to lower their prices in order to evade taxes.

Le Dinh Loi, deputy director of the HCMC Customs Department, said the agency has suspended the three customs officers of the department, and coordinated with the police investigation agency to clarify the import of goods of Nam De services and trading company in HCMC’s District 3.

Three suspended customs officials are Vo Van Khanh (registration staff), Nguyen Van Sang and Nguyen Buu You (goods inspection staff).

HCMC Customs Department has also required three officers to explain and review responsibilities in the clearance of the container of fashion products originating from China by the Nam De Co. The police then intervened in the clearance process as they found that the shipment’s record showed that its origin was Italia.

Sources from the police department's economic crime investigation division (PC46) said it has sent invitations to Nam De Co, but PC46 scouts have explored a number of unreal addresses of the members of the company.

On November 27, PC46 seized a shipment of clothing, shoes, belts, and handbags of world famous brands when the shipment was moved from a truck to the basement of Sheraton hotel in District 1 for storage.

PC46 then identified the shipments, originating from China, had been imported to Vietnam with the value of each product were reported at only a few dollars, and the total tax payment of the shipment was worth about VND27 million ($1,300).

Meanwhile at the market price, this batch of products is worth several billions of dong (VND1 billion = US$48,000).

Be a smarter customer

Ms. Chau Boi Hue, CEO of Duy Anh Co Ltd - a distributor of many brands such as Bvlgari, Cartier, Rolex, Ferragamo, and Versace in Vietnam, said there are many ways to import those goods into the country.

"Because the market for such luxury products in Vietnam is still relatively small, most producers of those products choose a local distribution company to sell their items in Vietnam. There are only 5-6 distributors involved in selling such products in the country."

"The genuine products are usually imported directly from the country of manufacture of the brands, mainly from France, Italy, and England. Those products can also imported into Vietnam by individuals, and are usually sold together with many other brands in the fashion stores."

“Recently, I learned that the imports are carried out through a third country, which aims to change the origin and declare low value to circumvent the tax.”

"The local market is pretty much dominated by high-grade replica products which are 90 percent identical with the genuine products and are usually sold a few times lower than the price of the real things."

Regarding the recent indecent, Hue said though the authorities have not yet identified if it's a brand name counterfeit or tax evasion case, but the imports and sales of the genuine products must comply with many regulations and under strict control from the foreign companies owing the brands.

However, there are circumstances in which the employees replace a real one with counterfeit goods to smuggle it out to sell.

To avoid such circumstance, in addition to the management measures, such as installing cameras and labeling distributor stamps on the products, offering value added tax invoices is another way, as no employee dares to do that for a counterfeit product.

“So as to know if a product is a real or a counterfeit one, the first job the customers should do is visiting the brand's website for information about official distributors and their addresses.“

“Then customers need to combine multiple factors to identify the genuine and fake goods, as an genuine item is always attached with information such as origin, information about goods storage condition, materials, manuals, its manufacturers’ stamp, stamp of distributors, and anti-counterfeit stamp.”

“With many bags products, manufacturers also add code for traceability, and even small accessories, such as glasses and scarves, have labels with complete product information.

Customers should also ask for value added tax invoices when shopping for those products, as the invoice can also help in the case of faulty goods.

In addition, shoppers can go to tax refund agencies to make sure that the sources of the products have been verified.

Phan Hoan Kiem, head of the market management department of Ho Chi Minh City, told Tuoi Tre that it has dispatched many teams to track for signs of counterfeit goods of famous Italian, French, and American brands at commercial centers and major fashion shops in the city.  According to the agency, those counterfeit goods of major brands are manufactured overseas (mostly from China) before being imported to Vietnam.  Those fake products have identical patterns to the real stuffs, but are divided into many different quality segments.

Tuoi Tre


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