Iran Customs Revenues Up 61%

EghtesadOnline: Despite the decline in Iran's imports last year (March 2016-17), customs revenues saw a 61% rise, the deputy head of Islamic Republic of Iran Customs Administration said on Saturday.

News ID: ۷۴۳۳۶۹

20 August 2017

“IRICA earned a total of 86 trillion rials ($2.26 billion) in customs duties from imports worth $50 billion in the fiscal 2013-14 compared with 181 trillion rials ($4.76 billion) from imports worth $44 billion last year,” IRNA also quoted Foroud Asgari as saying.

The official was referring to the import of non-oil commodities during the period.

Last year's imports saw a 3.58% growth in value compared to the year before, Financial Tribune reported.

> Single-Window System

Asgari attributed the rise in revenues partly to the implementation of the so-called "single-window system".

The single-window system enables cross-border traders to submit regulatory documents such as customs declarations, applications for import/export permits, trading invoices and investment permits to a single entity and/or single location. This allows for more control and supervision, reduces red tape and boosts IRICA’s efficiency and revenues.

Field corn, soybean, cars, auto parts and rice were Iran’s main imports in the last Iranian year. Major exporters to Iran in 2016-17 included China ($10.73 billion), the UAE ($6.4 billion), South Korea ($3.46 billion), Turkey ($2.73 billion) and Germany ($2.53 billion).

IRICA's latest data show Iran imported $15.81 billion worth of non-oil goods during the first four months of the current Iranian year (March 2017-18), registering a 23.97% rise year-on-year. The imports chiefly included rice ($603 million), field corn ($484 million), vehicles of engine displacement between 1500 cc and 2000 cc ($426 million), soybean ($338 million) and auto parts ($311 million).

Major exporters to Iran included China ($3.49 billion), the UAE ($2.99 billion), South Korea ($1.07 billion), Turkey ($958 million) and India ($891 million).

The southern Hormozgan Province, with 120 trillion rials ($3.2 billion), accounted for most of the customs revenues earned last year.

Hormozgan has 1,000 kilometers of coastlines stretching from the Persian Gulf to its southwest facing the UAE, Qatar and Bahrain, and to the Sea of Oman to its southeast facing Oman.

The province’s capital and port city Bandar Abbas occupies a strategic position in the Strait of Hormuz—a key waterway from which almost half the world’s oil supply passes.

It is also home to Iran’s biggest container port Shahid Rajaee, which accounts for more than half of Iran’s total port throughput.

Some 44 million tons of goods worth more than $11.14 billion were exported from and nearly 10 million tons worth $18.65 billion were imported to Iran via Shahid Rajaee Port in the last fiscal year, registering a 44% and 12% growth in tonnage and value respectively compared to the year before.

Some 5 million tons of cargos were transshipped at the port over the period.

> Fight Against Smuggling

The fight against smuggling was another contributing factor to increase customs revenues under the government of President Hassan Rouhani.

The total value of smuggled goods during the three fiscal years 2013-16 stood at $25 billion, $19.8 billion and $15 billion respectively.

“Last year, the figure shrank to $12-13 billion, indicating a substantial decrease of 50% compared to the year in which Rouhani came to power [2013],” Qasem Khorshidi, the spokesman of the Headquarters to Combat Smuggling of Goods and Foreign Exchange, has been quoted as saying.

Installing customs and border protection equipment, and using X-ray trucks and sniffer dogs were among measures taken to combat smuggling.

Nonetheless, smuggling remains one of the main issues overshadowing Iran’s economy.

According to the Headquarters to Combat Smuggling of Goods and Foreign Exchange, per capita consumption of contraband in Iran stood at $197 last year.

Contraband comprises 83% of the mobile phone market, 47% of toy market, 27% of the apparel market and 21% of the household appliances market.

> Drawing on ICT

The use of up-to-date software and hardware technologies has dramatically helped the Islamic Republic of Iran Customs Administration revolutionize the processes and services involved in trade, leading to efficient performance and ease of trade.

As the caretaker of Customs Administration's ICT Office, Firouzeh Khiali, told Financial Tribune on the sidelines of the 23rd Iran International Exhibition of Electronics, Computer and E-Commerce, also known as Elecomp 2017, last month, IRICA has incorporated mechanization.

At the intra-organizational level, all processes and services of goods clearance were planned to be performed electronically, and at the inter-organizational level, the single-window system was implemented to take care of all services and interactions for beneficiaries electronically.

The new system runs 24/7, increasing both speed and accuracy, which was not possible in the old system.

Khiali explained that before the implementation of this system, documents had to be obtained by individuals from IRICA and then handed in to other relevant organizations for further actions, which took a very long time.

"The traditional system was prone to forgery. Now everything is done safely without the slightest possibility of misuse,” she said.

IRICA has also launched the Pre-Arrival Value Declaration of imported items, based on which traders supply customs officials with information about goods before they are brought into the country, enabling authorities to calculate the value and set the import tariffs in advance based on factors such as the source country, type of cargo, currency, etc. This speeds up the process of clearance hugely and eases trade.

“These examples indicate that IRICA has taken advantage of software and hardware technologies, and we have come to an understanding that we can use information technology to improve trade,” she added.

Changes in the system implemented by IRICA have led to huge improvements in Iran’s performance on a global scale in that the World Bank ranked the country 96th among 160 nations in Logistics Performance Index in 2016, which indicates an improvement of 23 steps.

LPI is an interactive benchmarking tool to help countries identify the challenges and opportunities they face in undertaking trade logistics and what they can do to improve their performance.