China Customs: From Separate Taxation to Centralized Taxation
01/30/2015
China Customs has changed taxation model to the centralized one from the original separate one when it comes to revenue collection. In the one year when they were trialing the new model, the 47 enterprises have acquired a guarantee of more than RMB 1.2billion for the payable duties and taxes and gone through the centralized procedure for 27,000 bills of taxation.
The General Administration of Customs started to trial the centralized taxation model in October 2013. Under this model, enterprises can pick up the goods first as long as a valid guarantee is in place. After the goods are released, the enterprises then pay the duties and taxes in a collective way within the prescribed period. With this model, the original way of immediate taxation for each declaration at the border will be changed.
Since the new model drops the old way of duty payment by the enterprises on each declaration before the goods are released and allows the enterprises to fetch the goods first against a valid guarantee, enterprises will spend far more less time on the whole import procedure (from declaration making to release of goods) based on the fact that goods will stay for a shorter period of time at the harbor. Enterprises said that the time spent on customs procedures for low-risk goods (from declaration making to release of goods) was cut from about 2 hours to 10 minutes. If using the collective taxation model, they can have their imports released the same day when they have made the declaration. Also, a lot of enterprises save money and reduce expense (for example, on human capital and on other operational items) from the removing of the designated position for handling duty paying, as the new model allows them to go only once a month for duty paying in a collective way.
Mr.Zhang Guangzhi, the spokesman of the General Administration of Customs, said that the bank’s providing guarantee for payable duties and taxes can lower the risk in customs revenue collection. It is a good way to both facilitate clearance and ensure revenue safety.
Zhang said, focusing on system optimization, China Customs would seize the opportunity of the construction of China(Shanghai) Pilot Free Trade Zone and take under advisement the development of the collective taxation system(Stage Ⅱ) based on the review of and experiences got from the previous Stage Ⅰprogram. The Stage Ⅱ program of the collective taxation system will try to improve the system’s functions and enlarge its handling capacity, bringing benefits to more enterprises.
The General Administration of Customs started to trial the centralized taxation model in October 2013. Under this model, enterprises can pick up the goods first as long as a valid guarantee is in place. After the goods are released, the enterprises then pay the duties and taxes in a collective way within the prescribed period. With this model, the original way of immediate taxation for each declaration at the border will be changed.
Since the new model drops the old way of duty payment by the enterprises on each declaration before the goods are released and allows the enterprises to fetch the goods first against a valid guarantee, enterprises will spend far more less time on the whole import procedure (from declaration making to release of goods) based on the fact that goods will stay for a shorter period of time at the harbor. Enterprises said that the time spent on customs procedures for low-risk goods (from declaration making to release of goods) was cut from about 2 hours to 10 minutes. If using the collective taxation model, they can have their imports released the same day when they have made the declaration. Also, a lot of enterprises save money and reduce expense (for example, on human capital and on other operational items) from the removing of the designated position for handling duty paying, as the new model allows them to go only once a month for duty paying in a collective way.
Mr.Zhang Guangzhi, the spokesman of the General Administration of Customs, said that the bank’s providing guarantee for payable duties and taxes can lower the risk in customs revenue collection. It is a good way to both facilitate clearance and ensure revenue safety.
Zhang said, focusing on system optimization, China Customs would seize the opportunity of the construction of China(Shanghai) Pilot Free Trade Zone and take under advisement the development of the collective taxation system(Stage Ⅱ) based on the review of and experiences got from the previous Stage Ⅰprogram. The Stage Ⅱ program of the collective taxation system will try to improve the system’s functions and enlarge its handling capacity, bringing benefits to more enterprises.
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