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Suvarnabhumi » Customs free zone split up at Suvarnabhumi Airport will be reviewed today

Wednesday, October 17th, 2007

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The government will meet today to debate whether to split the customs-free zone at Suvarnabhumi Airport to help improve operations.

Sansern Wongcha-um, the deputy finance minister, said that drafting a new zoning plan with normal export and import operations separated from the customs-free zone was one possibility to be reviewed by the committee, which is chaired by Interim Prime Minister Surayud Chulanont.

The zone is intended to facilitate imports of raw materials and intermediate products to be processed locally before being re-exported as finished goods. Products entering the free zone are exempt from normal import duties.

But Mr Sansern acknowledged that the system was largely ignored. Most operators instead choose to go through normal customs clearance and then seek tax refunds after exports are completed. Cited that most overseas airports offered separate facilities for customs-free zones and normal processing facilities.

The Transport Ministry has already directed Airports of Thailand, the state-owned operator of Suvarnabhumi Airport, to improve its facilities under the ”one-stop services” concept to expedite the processing of imports and exports.

According to one study, only 10% of inbound and outbound shipments are made through the free-zone system.

Sources said one option would be to delay full implementation of the concept for one year and construct new bonded warehouses and transport facilities to improve services.

Another option would be to split the area used by the current facilities, with the free-zone area reduced substantially in favour of a separate zone dedicated to normal import-export processing.

One complication with the operations of the free zone rests with the electronic Air Cargo Community System, a system aimed at tracking cargo in the air and on the ground, and its inability to properly link with the Customs Department’s e-Customs systems.

Another problem, according to ministry officials, is the fact that the policies set to declare Suvarnabhumi as a customs free-zone only added greater bureaucracy and red tape to cargo processing, given the need to ensure that tax-free imported goods were actually re-exported rather than illegally sold in the country.

”While Singapore and Hong Kong have proven successful in implementing the concept, it’s because they don’t collect duties. It’s not a concept that works for Thailand, which has a complicated system of taxes and customs duties,” the official said.

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