Effective Friday, April 8, China began to implement a new tax bill that charged a levy on over 1,100 items purchased online overseas. The items now subject to tax upon arrival at China’s airports are cosmetics, food, home appliances, shoes, clothing, baby products and other items.
The aim of the new tax is to level the playing field because between online and offline sellers of imported items since those products bought online have lower tax rates compared to when purchased abroad, reported People’s Daily Online.
It is a 17 percent value-added tax and consumption tax. It is higher than the 10 to 50 percent postal articles tax in a bid to remove the duty-free exemption of goods with tax payable not exceeding 50 yuan. Under the new rules, packages with a value beyond 2,000 yuan and products mailed to another person beyond 20,000 yuan in value would have a higher tax than general trade items, reported Asia Times.
However, the new tax policy resulted in photos of beauty items going viral on Sina Weibo taken at Shanghai Pudong International Airport. There are speculations that Chinese tourists who purchased the items overseas threw away the cosmetic to avoid paying taxes.
But Shanghai Customs denied the rumor and said that the items imported from South Korea were just being routinely inspected by airport officials. It was simply piled up in various categories to make inspection convenient.
The country’s Ministry of Finance published on Thursday the list of over 1,100 imported items purchased abroad. However, on Sunday, the ministry clarified that Chinese travelers could bring in 5,000 worth of imported items without being charged a duty.
The new tax would affect the most low-cost cosmetics imported from South Korea with a tax price below 100 yuan because it would increase the cost of those items which accounts for over 30 percent of cross-border e-retails, said Niu Wenyi, partner at a company which sells imported goods to Chinese consumers online.