“How does mail smuggling harm Ukrainian business and the state?”, — write: epravda.com.ua
Recently, the chairman of the Committee on Tax and Customs Policy noted that the Parliament will soon return to the issue of taxation of international parcels. The Chairman of the Committee noted that now Ukraine actually favors the Chinese producer, the foreign producer, putting the Ukrainian in unequal conditions. Therefore, it is worth analyzing the current situation with international parcels. Volumes and dynamics According to the Ministry of Finance, during 2022-2023 and the first nine months of 2024, 137.5 million international postal and express items with a total value of UAH 185 billion were imported into Ukraine. The volume of tax-free parcels is growing every year – in the first 9 months of 2024, the indicators have already exceeded the annual data of the previous year by 43.8% in total. Read also: The state seeks to tax parcels from Aliexpress and Temu. What will it change? Advertisement: The current tax system provides that goods with a value of up to 150 euros, which are forwarded for personal use, are not subject to taxation. This norm, which is actively used for “gray schemes” by collecting tax-free parcels in commercial lots, led to significant budget costs: in 2022, the volume of untaxed transactions amounted to UAH 23 billion, in 2023 – UAH 40.1 billion, and for 9 months of 2024 – already 44.6 billion UAH. In addition to under-revenues to the state budget, untaxed Chinese goods (78% of all parcels – from China’s Aliexpress, Cainiao, Temu) distort competition and significantly harm Ukrainian producers of similar goods. What can be done to protect the Ukrainian producer without harming consumers? To solve the problem of “postal smuggling”, the EU has successfully applied the One Stop Shop model, which involves taxing the seller’s value added tax, without any inconvenience to consumers.Advertisement: The OECD offers clear recommendations for countries to start applying the optimal “seller/supplier model” in administration of taxes in parcels with VAT: Transfer the responsibility for VAT payment to non-resident suppliers and digital platforms – charge VAT at the point of sale. Implement an effective and efficient collection mechanism – periodic payment of VAT through simplified online registration and compliance regime. Facilitate compliance and strengthen enforcement with modern data-driven risk management and administrative collaboration – no VAT on import and fast customs clearance. The key elements of such a model for Ukraine should be: Lowering the unpaid value threshold to 45 euros for transfers between individuals Implementation of a special VAT taxation procedure for distance sales of goods worth up to 150 euros Transferring responsibility for paying tax to the seller Introduction of a simplified tax reporting system for distance sales operations What are the consequences of the reform for the state budget and competition? According to preliminary calculations by experts, the implementation of these changes will bring an additional 17.7 billion UAH in VAT revenue in 2025. At the same time, it is important that the proposed model complies with EU directives and OECD recommendations, which is especially relevant in the context of Ukraine’s European integration aspirations. The reform allows not only to increase revenues to the budget, but also creates fairer conditions for all market participants. It is important that this approach does not involve an additional burden on legal business, but on the contrary, is aimed at combating unscrupulous tax avoidance schemes. In the conditions of a full-scale war, Ukraine faces a double challenge: on the one hand, there is an urgent need for additional funds to ensure defense capability, and on the other hand, the preservation of the viability of business and economic activity. In this context, the field of international mails deserves special attention, which for a long time remained on the periphery of fiscal policy, but now shows a significant potential for filling the state budget. Reforming the system of taxation of international postal items is an example of a balanced approach to filling the budget in wartime. These changes prove that additional resources for financing defense needs can be obtained without creating a strong pressure on business and consumers, while bringing Ukraine’s tax system closer to European standards.