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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

Friday, Aug. 1


Bikers from all around the world will gather to take part in a parade, extreme shows and rock concerts during the International Biker Festival that revs its engines today and runs through Aug. 3 near Olgino Hotel, 4/2 Primorskogo Shosse.


The Peter and Paul Fortress will be turned into an open-air cinema today and tomorrow as part of the 5th International Short and Animation Film Festival. A huge screen across the fortress walls will air short films non-stop with board games, photo sessions and other activities also on offer for visitors. For more information, visit www.opencinemafest.ru



Saturday, Aug. 2


Gatchina Palace Park Museum will host its second annual Night of Light, an impressive audio-visual show across the night sky. Tickets are 600 rubles ($16).


If graphic design is more your thing then check out Illustration Day, where you will be able to visit an exhibition, attend lectures by professionals and even show experts some of your own work. The event starts at noon at Zona Deystvia, 73 Ligovsky Prospekt. The entrance fee is 350 rubles ($10).



Sunday, Aug. 3


History lovers shouldn’t miss the chance to see reenactments of World War I battles in Pushkin at noon. Besides exciting war scenes, visitors can enjoy live music, historical costumes, an equestrian show and a fancy-dress parade starting from the Moscow gates.


Garage Sale, the popular and growing flea market where nothing is priced over 500 rubles ($14.11), starts today at noon in Loft-Project Etagi, 74 Ligovsky Prospekt. Be sure to get in early to score a bargain. Entry costs 50 rubles ($1.40)



Monday, Aug. 4


Continue the working week with a calm and steady mind with a free yoga lesson at 7 p.m. in the Bukvoyed store at 23A Vladimirsky Prospekt.



Tuesday, Aug. 5


Visit The Romanov Dynasty doll exhibition today, where more than fifty porcelain dolls depicting Russian rulers, and made by Olina Ventzel, will be on show. The exhibition continues through Aug. 31 in Sheremetyev Palace, 34 Fontanka Naberezhnaya.



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