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Government Extendeds Customs Duty to Combat Foreign Advantage

Published: June 20, 2014 (Issue # 1816)



  • A staff member leaving a customs control zone.
    Photo: A. Makhonin / Vedomosti

The Finance Ministry on Friday published a draft of a long-awaited bill that could lower the limit on the value of personal purchases that can enter Russia customs-free from 1,000 euros ($1360) to 150 euros ($204).

Russia-based Internet retailers have long complained that the current threshold gives foreign retailers an unfair advantage, allowing them to slash prices below those offered by domestic retailers, who have to pay taxes and customs duties on the goods they import to Russia.

At President Vladimir Putin's meeting with Internet businesses in early June, Maelle Gavet, CEO of Internet giant Ozon, said that Russia was losing 98 billion rubles a year ($2.8 billion) due to poor regulation of goods sold over the Internet by foreign e-commerce companies.

"In the rest of the world, the threshold value [for customs duties] is from 0 to 10 euros ($14)," Gavet said, RIA Novosti reported. "Law-abiding Russian stores, unlike their foreign colleagues, pay the legally necessary taxes and duties. Because of this it is becoming more and more difficult to compete on prices."

Putin responded that all companies who import goods across the border should face "identical conditions." The president signed a law in May that gave the government the right to change the parameters for customs-free imports.

The customs duty has become a hot topic in the e-commerce industry as cross-border trade expands its share of the market at a lightening rate. Cross-border trade more than doubled in 2014, reaching 20 percent of the total volume of e-commerce in Russia, while the market as a whole continued to grow at a rate of about 30 percent yearly, according to the Association of Online Vendors, or AKIT.

AKIT, whose members include such heavy-hitting online retailers as Ulmart, KupiVIP and Lamoda, has repeatedly complained that the current situation encourages domestic retailers to evade taxes and customs duties in order to offer competitively low prices.

In addition to the new 150-euro limit, the Finance Ministry's bill, which was published Friday on the government's legislation portal, requires a customs duty on all goods that weigh in at more than 10 kilograms, down from the current limit of 31 kilograms. The customs duty in Russia stands at 30 percent of the value of the imported good.





 


ALL ABOUT TOWN

Sunday, Jan. 25


Get out your running shoes for the 46th International Road of Life Marathon. Dedicated to the end of the blockade, three runs are offered — 5, 21 and 42 kilometer runs — starting in different places outside the city. Busses leave from 13/1 Arsenalnaya Naberezhny at 8 a.m. but check complete details and registration fees on www.newrunners.ru/race/doroga-zhizni-2015



If you are planning a wedding, head over to the Azimut Hotel, 43/1 Lermontovsky Prospekt from 11 a.m. to 6 p.m. The day includes live music, free dance classes and vendors selling wedding dresses, accessories, cakes and services to help make your special day perfect. Admission is free.



Monday, Jan. 26


Feeling stressed by the crisis? The Northwest Coach University at 3 Ulitsa Vostsstanaya is hosting a master class by lifecoach Tatiana Almazova. She will shed light on the coaching process, the usefulness of coaching during times of economic downturn and how coaching can improve your career and business prospects. The event starts at 7 p.m. and admission is free. Pre-register by calling 424 3700.



Discover the State Hermitage Museum's collection of English painting at a lecture by art historian Yelizaveta Renne at the Prince Galitzine Library, 46 Nab. Reki Fontanki. The event starts at 6 p.m. and the lecture will be followed by a concert of arias, songs and duets by English composer Henry Purcell. The event is free of charge.



Tuesday, Jan. 27


Celebrate the 71st anniversary of the end of the Siege of Leningrad on Palace Square with a free concert at 7 p.m. Listen to WWII-era songs and the poetry of Olga Bergholz while you peruse outdoor exhibitions dedicated to life during wartime. The event is capped off by a fireworks display at 9 p.m.



Stop by the Lexica School of Foreign Languages at 73 Ligovsky Prospekt from now until Friday for a free English lesson. The classes start at 7 p.m. and cover all levels, from Beginner to Advanced. Registration by telephone on 7641692 and a desire to improve your skills are the only prerequisites.







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