China’s General Administration of Customs recently announced the implementation of a new duty on overseas goods which enter China after being purchased online.
Starting April 8, Chinese customs officials have been empowered to collect additional value-added tax (70 percent of that already charged on regular imported goods) and consumption tax (a luxury tax) on all overseas goods purchased via the Internet valued at more than 2,000 yuan (US$308) per item, a raising of the previous 1,000-yuan (US$154) threshold, with exemptions capped at a total combined expenditure of 20,000 yuan (US$3077) in a single year.
According to officials, the regulation will “better manage the e-commerce business and create a fairer environment.” China already levies a 10-50 percent import duty on certain personal items brought into the country by post, a rate which professional importers believe cuts into their profits.
Analysts have stated that the new tax will increase the price of non-luxury overseas goods, making wildly popular imports like infant formula, for example, up to 20 percent more expensive. However, given public distrust in the quality of many domestic goods and the convenience of e-commerce, it is hard to say how much the new regulation will help swell the coffers of Chinese manufacturers.
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