What The Customs Revenue Benchmarking Database Will Do For International Trade
In modern trade, a Customs Revenue Benchmarking Database seems to be the Holy Grail that several nations seek. Disproportionate treatments and product classifications across various countries lead to different applicable duties on products in each country.
Therefore, the decision to export or import is fraught with complexities. Technological advancements have greatly streamlined the import/export process and made it easier for companies to engage in international transactions. Developments such as the Harmonized Tariff Schedule have also made product classification easier.
However, difficulties and complexities in international transactions still exist.
Customs Receipts: Are they about to be eliminated?
Many surveys have been conducted by organizations in Switzerland. These surveys helped to investigate the advantages of developing a Customs Revenue Benchmarking Database. Upon investigating the current situation, one of the primary challenges in developing the database is that customs receipts are beginning to lose importance.
This situation prevails in several countries that are members of the World Customs Organization (WCO). However, the ever-increasing
number of free trade agreements plays a significant role in this development.
Therefore, as of now, customs receipts comprise a small part of the total receipts that a country's administration receives.
For example, in Switzerland, the Customs Administration received CHF 20 million in customs receipts, which comprised approximately 33% of the total receipts that the Confederation received. Hence, Import duties comprised a mere 5% of these total receipts. Similar situations prevail in several countries. As of now, eliminating customs duties on goods in total is being considered.
Changing the duties of customs administrations
However, the tasks that customs administrations perform have changed significantly over time. In addition to collecting customs duties, they are also responsible for protecting and promoting domestic economies. Therefore, ensuring public safety and security through border protection is another responsibility.
Recently, customs administrations have had to perform tasks to protect the environment. This is done by imposing consumption-based incentive fees and taxes. Customs administrations are also creating other duties and taxes to generate revenue that will compensate for the decline in customs duties.
How a Customs Revenue Benchmarking Database would help
A well-developed CRBD would provide information on the receipts that a customs administration receives, irrespective of the reason for collection.
Ideally, the database should allow countries to gain an overview of the duties and taxes that customs administrations in different countries collect. Hence, this information should ideally be public knowledge so that nations and businesses may benefit from it.
The database would be of great use as countries will be able to easily understand all the taxes and applicable duties that each country imposes on all manner of international transactions.
The WCO would be an excellent platform for countries to exchange this information and provide the impetus for beginning the development of the database. A database would also facilitate setting an exemption limit for importing consignments that aren't that big.
As of now, a harmonized collection of import taxes and duties seems to be a distant and lofty goal. However, an overview would facilitate shared understanding and the development of common goals between countries, which, in turn, will provide impetus for developing the database.
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