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New tariff policy ushered in


05-13-2016 04:50 BJT

It's been more than a month since China ushered in a new tax policy, which requires products bought abroad, and in particular on e-commerce platforms, to be subject to import tariffs. How effective has the policy been, and what changes have been brought to e-commerce platforms, as well as consumers and travellers?

At Shanghai Hongqiao Airport's customs department, officials say more and more passengers are choosing to declare goods voluntarily.

"The new policy mainly adjusts the import tax rates. There's no changes to customs' other regulatory measures, as well as customs clearance process and the declaration of personal articles. And an obvious increase has been seen in the number of passengers who voluntarily declare to pay tax,"  Zhang Lei, official of SH Hongqiao Airport Customs, said.

The new rules only allow a maximum of 2,000 yuan per single cross-border transaction and a maximum of 20,000 yuan per person per year.

Goods that exceed these limits will be levied the full tax for general trade.

Meanwhile, online purchase of goods will no longer be treated as personal articles but as imported goods, which carry tariffs and other taxes.

And for e-commerce companies, this has meant a storm.

In this warehouse located in Hangzhou, orders they received for international products plunged after the policy was released.

"After April 8th, you could see, the orders we received were almost zero. Currently, the amount of orders is only one tenth of the previous times," Cross-border E-commerce Service provider Wang Yaowu said.

And it's happening to a number of companies around the country. Many cross-border e-commerce platforms were planning to switch to overseas warehouses, to directly mail the goods to customers from outside the country. However, as some found out, this was not a perfect plan.    

"After the tax reform, overseas direct mail was not influenced by the new policy. And many overseas warehouses have raised their rental prices. The policy forced many enterprises to choose to provide service outside China, which benefits foreign countries with more jobs and more tax income," Cross-border E-commerce Service provider Shan Li said.

While some providers are not happy about the restrictions, others find some positive aspects to the policy.

"I think the new policy gives recognition to cross-border e-commerce. It actually creates a fair environment of competition. Recognising cross-border e-commerce as a different type of businesses from the normal trade, and making adjustments to taxation policy, I think generally it's beneficial for the industry," Xing Yue, deputy general manger of TMall Global, said.

Shanghai Securities News on Tuesday reported that the policy may see some adjustments and the rules could be postponed for one year.

It was reported that during the one-year transition period, cross-border retailers could make more preparations for the new regulation.

If the report is correct, this will be the third adjustment for the new restrictions.

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