Money

Import tax to be levied on more parcels sent from overseas

By Shen Jingting (China Daily)
Updated: 2010-07-13 09:48

More postal parcels arriving in China from other countries will be subject to an import tax from Sept 1, according to the latest customs regulation.

Previously, when the import tax on a parcel was calculated as lower than 500 yuan, it was made exempt from fees. That minimum threshold will be dropped to 50 yuan, as stated on the website of the General Administration of Customs.

The new rule is expected to hit overseas purchasers the hardest, since they buy products on other people's behalf and earn commission from the deals.

Imported luxury items such as cosmetics, bags and clothes are the major items of business among those purchasers listed on Taobao.com, the biggest e-commerce site in China.

However, the new tax will squeeze out profits from their business.

"My boyfriend works in Japan, so when clients ask me to buy Japanese goods, usually cosmetics, I ask him to locate them. He buys there and mails them back," said private salesperson Li Huan.

Li's business grew after she started posting advertisements on forums in 2008. Compared with products sold domestically, her deals are cheaper and of equal quality, but she avoids tax.

"But now my business will suffer. Two bottles of perfume could have an import tax of more than 50 yuan, which means after September, I will have to raise my charges," Li said.

In another forum, an unnamed Taobao shop owner said he is stocking up on goods ahead of the regulation.

"If they (overseas purchasers) maintain profits by raising their prices, I will think twice before buying. However, if the price is still reasonable, I will buy," said Tan Jinjin, a graduate who said he regularly deals with overseas purchasers.

Yang Zhiqing, a professor at the Central University of Finance and Economics, said the new customs rule was aimed at covering holes in tax collection.

"We have observed a lot of people dodging taxes by sending postal parcels. This is a dramatic loss for the country. The new rule will prevent it from happening again," Yang said.