Customs chief defends mainland tax on iPads

PUBLISHED : Tuesday, 16 November, 2010, 12:00am
UPDATED : Tuesday, 16 November, 2010, 12:00am

Mainland customs authorities defended a new rule that means they can tax people taking in iPads.

Despite widespread criticism that the rule is a violation of Beijing's promise to the World Trade Organisation, officials said it was 'helpful'.

Huang Yi , head of the General Administration of Customs' Department of Supervision, said that people have to pay extra tax on their iPads as they are now categorised as laptop computers.

It is the first time customs have confirmed iPads are taxable, although stories of people being penalised for taking the devices to the mainland were reported before.

The new rule has already had a big impact on shops in Hong Kong, which offer the cheapest price for iPads in the world and attract busloads of customers from the mainland every day.

A shop owner at Wan Chai Computer Centre said business had fallen 30 per cent since mainland customs started to enforce the rule.

The regulation took effect in August but did not attract public attention until last month, when an increasing number of travellers reported having to pay 1,000 yuan (HK$1,165), or a fifth of the retail value, to take their iPads home.

Many users complained they had bought their iPads for less than 5,000 yuan - the threshold for a taxable electronic product in Hong Kong. Most iPads, except the top model, are sold below that price.

But Huang said they fixed the valuation of the iPad at 5,000 yuan because 'most laptops' cost that much and they had to take into consideration ' travellers' convenience and officer's work efficiency', the Beijing Evening News reported yesterday.

Huang made the remark after the Ministry of Commerce raised the question with customs last month.

The ministry issued a letter to China customs, pointing out that one of the mainland's major promises to the WTO was to entitle all information technology products to zero-tariff treatment once the country joined the organisation.

The report also quoted the ministry as saying both the iPod value set by customs and the 20 per cent tax rate were too high.

Meanwhile, consumers complained about having to pay up.

Zhu Lieyu , a senior lawyer with Guangdong Guoding Law Firm, said the regulations violated China's promise to eliminate duty on IT products covered by the WTO's Information Technology Agreement.

They also seemed to ignore the basic fact that people always take portable electronic devices with them on cross-border trips.

'It does cause a lot of trouble to ordinary travellers entering the mainland, so how can they call it convenient?' he asked.

'The purpose of joining the WTO is to open the market to other countries and mutually benefit from the openness,' he added.

'A shutdown or monopoly hurts only our people, who have to put up with more expensive products.'

 

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