Import surveillance application based on price criteria: Its effects on industrial production, problems and solutions

One of the most important topics in the collection of customs taxes has long been the determination of the tax base for the calculation of the tax. In line with the discussions that emerged especially after the GATT and WTO, the opinion that the advalorem base should be taken as the basis in the import tax base has gained weight. For this reason, the importance of customs valuation has increased, and valuation methods, which have been problematic area for centuries, have been the subject of discussions. In this study, the surveillance application based on price criteria was handled in this context and the benefit obtained from the application was tried to be determined by examining its effect on industrial production. For this purpose,since data is easier to obtain and it's representation ability is higher in comprasion with other sectors, the example of surveillance application in the Paper and Cardboard Industry has been discussed.Using monthly data for the period between 01/2005 and 12/2021 in Turkey, import unit values of notebooks, letter holders, notepads, memoir books in HS Code of 4820.10.30.00.00; import unit values of folders, binders, file liners and covers in HS Code of 4820.30.00.00.00 and import unit values of wallpapers and similar wall coverings in HS Code of 4814.20.00.00.00 as independent variables and production index of cardboard and paper industry which are adjusted for seasonal and calendar effects as dependent variable were subjected to ARDL bound cointegration test. When the ARDL F bound statistic and the critical values were compared, it was noticed that all the variables were in a substantial equilibrium relationship in the long run at the 1% significance level. According to the long-term coefficients, no statistically significant effect of the import unit values of notebooks, letter holders, notepads, and memoir books was detected on the dependent variable at the 10% level of significance. It was seen that the import unit values of folders, binders, file liners and covers had a statistically significant and positive effect on the dependent variable at the 10% level of significance. Accordingly, a 1% increase in the independent variable leads to an increase of 1.24% in the dependent variable in the long run. It was remarked that the import unit values of wallpapers and similar wall coverings had a statistically significant and positive effect on the dependent variable at the 1% level of significance. Accordingly, a 1% increase in the independent variable leads to an increase of 1.04% in the dependent variable in the long run. In addition, it has been determined that the effects for the established model appear in the long term, not the short term. Based on the results of the analysis, it could be concluded that the benefit obtained from the surveillance application should be calculated periodically and the practices that have no effect on industrial production should be abolished. In this case, the artificially increased import price will decrease and also lead to a decrease in consumer inflation. In addition, consumption increases due to the falling import price will lead to an increase in the total amount of imports and thus in the total tax revenue on imports. The study was completed with the suggestion that it would be appropriate to use the obtained treasury income as an incentive or subsidy in more productive industries intended to compete with the imported products. Keywords: Customs, Surveillance, Valuation, Production, Import.