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
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, chief executive 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
"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.
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