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| 6th Report of Market Access Ombudsman Council (March 16, 2000) |
1. Complainant: Tokyo Chamber of Commerce and Industry
2. Ministry concerned: Ministry of Finance
3. Complaint:
The United States levies no taxes at the time of import except for customs duties, but in Japan consumption tax is paid even on goods which require no customs duties, when the goods are imported and cleared through customs. Post-import reporting applied mainly to dutiable goods, before the consumption tax was introduced, but now all goods are subject to post-import reporting and this involves a great deal of clerical work.
Accordingly, as in the case of customs duties, importers should be exempted from paying consumption tax when the goods are cleared through customs; this would make it unnecessary to declare the value of non-dutiable goods and simplify customs clearance.
4. Corresponding Policy of the Ministries concerned:
(1) Consumption tax on imported goods is levied at the time of import, for the reasons below. It is to be declared and paid on each occasion, and it is not possible to establish a system for declaring and paying the tax for a specific period all at once, as in the case of domestic transactions.
1) When businesses import, if consumption tax is not levied at the time of import, it becomes possible to lay in stock of imports at the price excluding tax, whereas domestic goods are laid in at the price including tax, which will impinge upon the fairness of economic transactions.
2) Since parties liable for paying tax on imported goods include not only the taxed businesses but tax-exempt businesses and private individuals as well, the opportunity to levy the tax is lost if this is not done at the time of import.
Further, even if the importer is a business taxed on domestic transactions, consmption tax paid on imports corresponding to tax-exempt sales cannot be claimed as tax on laying in stock, and it is necessary to levy the appropriate tax at the time of import.
3) When goods are imported, the importer must make a declaration to the head of the customs office even if the goods are non-dutiable and obtain an import permit, and accordingly, levying domestic consumption tax applicable to imports as part of import procedures and completing payment of the tax together with duties when clearing customs is the most efficient and practical method.
4) Like Japan, other countries also use the system of completing tax-related procedures at the time of import.
Regarding payment of consumption tax on imports, a grace period (of within 3 months) is allowed, and more extensive computerization, including the NACCS system, is in use to speed up customs clearance paperwork and add to the convenience of taxpayers.
(2) Parties importing cargo must make an import (tax payment) declaration because in order to determine the taxable case resulting from the act or fact of importing and to ensure revenue from tariffs and consumption tax, tax is levied at the time of declaration as part of import procedures, and tariffs and consumption tax are collected together, and it is thus impractical and inappropriate to delay declaration (evaluation) for non-dutiable goods only.
It is of course necessary to carry out correct tariff valuation of non-dutiable goods, but in order to lighten the paperwork burden on importers, it is not necessary to submit a valuation declaration for non-dutiable goods. (Customs Law Basic Directive 7-10(1))
(3) Where consumption tax on imports is concerned, customs offices, in order to maintain orderly declaration and tax appropriately and fairly, conduct inspections after import permits are granted (post-inspection) by checking ledgers to confirm whether value was declared appropriately; in case of inappropriate declaration, rectification is required, to ensure appropriate application of the system.
In a decision in March 1995, the Office of Market Access stated that "parties making declarations should only be required to present the minimum documentation necessary, in the case of post-inspection." However, when documentation to be inspected is preserved electronically, customs offices do not require the taxpayer to print out all the documentation; instead, as a way of lightening the burden, confirmation is carried out by searching the electronic data.
5. Remarks
The complainant accepted this policy.