Trade globalisation and the reform of customs valuation and VAT on importation of goods: the example of Thailand

Abstract

The purpose of this thesis is to reform customs valuation law and VAT on importation of goods under trends in trade globalisation, using Thailand as the example. To achieve this purpose, a number of related topics (e.g. the 'notional' and 'positive' concepts of value, international customs valuation systems - the Brussels Definition of Value and the WTO Customs Valuation Agreement the destination and origin principles, VAT on importation, and the ASEAN Free Trade Area (AFTA)) are brought to analysis in a comprehensive way. The research findings indicate that the existing system of customs valuation in Thailand is arbitrary and constitutes a significant barrier to trade. Such problems will be reduced (or eliminated) under the new customs valuation legislation, based on the WTO Customs Valuation Agreement. However, the system of the WTO customs valuation is complicated, creating some difficulties for developing countries like Thailand to apply. In this connection, co-operation among ASEAN customs administrations should be enhanced. The 'regional minimum values' should also be applied for determining the customs value where the transactions within the ASEAN region are between related parties. With regard to VAT on importation, it is found that, in the two countries (the UK and Thailand) surveyed, there is no particular problem inherent in the destination-based VAT. Most problems relate to the administration as well as the base of VAT on importation in Thailand. Reforms on these matters have to be undertaken unilaterally and voluntarily to improve prospects for attracting foreign investment and increasing trade. This thesis is based upon law and agreements in force at 31 December 1999.