The World Customs Organization’s (WCO) Revenue Conference, held from 30 June to 1 July, welcomed over 120 representatives from Customs administrations, inter-governmental organizations, and the private sector. The Conference was opened by WCO Secretary General Kunio Mikuriya and chaired by WCO Deputy Secretary General Sergio Mujica. High-level delegations, including Directors General from a variety of Customs administrations, ensured a lively and pertinent Conference structure.
Presentations and discussions centered on a wide range of revenue-related topics including the relationship between Customs valuation and transfer pricing, VAT systems, environmental taxes including CO2 taxes, excise taxes, compliance and enforcement matters, de-minimis levels, informal trade practices, regional integration and the closely linked issue of preferential rules of origin. The panel format enabled lively debate and a thorough question and answer session.
In addition, the Conference featured a panel on the implications of the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA) on Customs revenue collection. A WCO research paper prepared for this panel contends that TFA implementation is likely to have a positive impact on Customs revenue particularly through increased trade volumes, higher trader compliance, and further recovery of revenue loss. Although several TFA measures could potentially cause a decrease in revenue, the impact of such measures could be negligible, or outweighed by the increase in revenue resulting from the uniform implementation of the TFA. The paper concludes that additional revenue resulting from TFA implementation would be sustainable, and would have a positive impact on domestic revenue mobilization, especially in developing countries where Customs revenue accounts for a substantial portion of government tax revenue. The panelists generally agreed with the assertions of the WCO research paper.
With respect to the complex issue of the relationship between Customs valuation and transfer pricing, the panel of experts discussed options for advancing work in this area, based on the work currently being carried out by WCO, in coordination with OECD and the World Bank Group.
The challenges of the informal trade sector to efficient revenue collection were discussed. It was acknowledged that a balance was needed whereby Customs encourage the formalization of procedures wherever possible, and also seek practical solutions given that this was a cultural phenomenon which is likely to persist.
In his closing remarks, the WCO Secretary General commended Conference participants for actively contributing to the dialogue on this vital issue for many Customs administrations and noted the valuable proposals for moving ahead on the WCO’s Revenue Package programme, in particular at the upcoming WCO Working Group on Revenue Compliance and Fraud which will have its first meeting in December 2014.