Customs process needs reform

The Customs department is unsystematic, lacks clear standards for classification and specification of import types, and is unnecessarily bureaucratic, they say, adding that small- and medium-sized businesses are the most affected. 

“Big corporations can import machinery with the permission of the Myanmar Investment Commission and get it duty free, but these famous businessmen comprise less than 10 per cent of the total. It is the remaining 90 per cent who suffer from problems at Customs,” said one machinery importer who asked not to be named.

Another importer, who also spoke on condition of anonymity, said the problem was the system, not the staff. “The difficulties [importers face] are a result of a bad system, not particular staff,” he said, adding that even when staff were replaced for wrongdoing there was no change. “The department takes action against staff found guilty of wrongdoing, but when their replacements arrive the same complaints are filed against them because the problems recur,” he explained. 

“We need to change the system, not the people,” he said. 

Importers told Eleven Media that four areas needed to be looked into at the Customs department. The current system’s impact on the public needs to be assessed and the department should also be compared with other departments that have undertaken measures to reduce corruption, such as the Internal Revenue Department. Importers also called for the effectiveness of staff and systems to be assessed. 

Goods imported with official licences still got stuck in port due to delays, causing importers unnecessary costs, they said. Duties are higher than they should be because Customs officers are revaluing the price of goods at levels higher than their selling price, the importers said.

Automobile importers said that despite the reduction of import duties on cars with less than 1300cc in engine power and worth less than US$5,000 (about Bt150,000), Customs officials sometimes imposed restrictions on cars for other reasons.

Vehicle importer Maung Soe said a car was classified as a truck causing him to pay a higher import fee. “Despite knowing that any car with a 1300cc engine is importable, the Customs deemed my 650cc Suzuki Carry a ‘truck’, saying it was a kind of pick-up,” Maung Soe said, adding that he had to pay a higher import duty. “It was wrong and unnecessary,” he said. A machinery importer said he had to pay an import duty on a new printing machine that was 20 per cent higher than its actual price. “When I asked why they increased the duty, no answer was given,” the importer said. “To prove the actual price, I also asked the authorities to open the container and check the machine, but nothing worked.” 

Importers say that Customs should follow the path set by departments like Internal Revenue, which implemented initiatives to eliminate red tape and corruption. It amended tax laws and systems that have made paying tax more convenient and raised government income.

Following amendments in September 2011 to income and commercial tax laws that were requested by the public, the government is seeing a surge in tax revenues, which are one third higher in the first three quarters of this year than they were for the entire fiscal year before. 

The Central Bank has also made changes that have made doing business simpler, such as easing trade in currencies, importers said.

If the Internal Revenue Department and the Central Bank were able to implement reforms that benefited both the public and the government then there is no reason why Customs cannot follow suit, they said.

“Rules and regulations need to be convenient,” one importer said. “Customs has unnecessary steps, like revaluation when they should have standardisation. Whatever the imported good is, it needs a standard tax rate per year. Under the current system they allow import of goods deemed necessary and restrict those deemed unnecessary,” he said.