Why Hetmantsev encourages the Verkhovna Rada to remove the tax exemption for parcels up to €150
3 October 2024 19:21
EXCLUSIVE
Yesterday, Danylo Hetmantsev, chairman of the Parliament’s tax committee, said that the Verkhovna Rada was finalising a draft law on taxation of international parcels worth up to 150 euros. According to him, this has a destructive effect on the domestic market. He emphasised that he would personally ask MPs to support the bill.
In an exclusive commentary [Kommersant]oleg Getman, coordinator of expert groups of the economic expert platform, associate expert of CASE Ukraine, stressed that such possible changes would not affect pricing in stores.
“This will not affect prices in stores and supermarkets. Because all these importers import goods legally, pay 20% VAT, so all the goods we buy there are already sold with the tax included,” said Getman.
He explained that the tax exemption (goods up to €150 are not subject to taxation and customs clearance – ed.) has long existed in Ukraine, but it now creates unhealthy competition and harms domestic producers.
“For a long time, there was a certain privilege for individuals. That is, if they ordered a parcel up to €150, they did not have to pay VAT. However, recently, large Chinese marketplaces have started to take advantage of this and are trying to saturate the markets of developing countries, including Ukraine, with their cheap Chinese goods. And by doing so, they are significantly harming domestic producers. Because a Ukrainian manufacturer who produces the same product, say, a light bulb or a shirt, pays this 20%, while the Chinese do not. That’s why there is a huge imbalance, and it is only gaining momentum,” Hetman believes.
In addition, fraudsters who minimise taxes and try to work in the black have organised a whole scheme based on this.
“They order goods using thousands of “left-handed” passport photocopies, receive these goods without paying taxes and then sell them online without paying VAT,” – said the expert.
At the European level, this issue has long been successfully resolved, and Ukraine will benefit from the experience of its colleagues.
“The Europeans have solved this issue long ago. They have moved to the European one-stop shop model, where the consumer does not notice this tax. That is, the tax is already included in the price, no one pays it separately. Our MPs also decided to use this European model. That is, after the adoption of the relevant initiative, the state will force large trading platforms such as alibaba, Temu, Ali exprès to immediately indicate the price including VAT. And then they register their representative office and transfer all the accumulated VAT for the month to our state,” the expert said.
This way, Ukrainian producers will get fair competition and the state will receive additional funds.
Author – Alyona Kaplina
