China Briefing | Disservice to the people: the problem with China’s e-tailing taxes and bans on electric bikes
Higher taxes on cross-border e-commerce and limits on electric bicycles get in the way of a balanced economy and the ability of the poor to make a living
Mainland officials take great pride in preaching that the government is there to “serve the people” but many of their policies only end up getting in the public’s way.
The two latest examples involve the change in taxes on online retail sales of overseas consumer goods and the decision to restrict the use of – or even ban – electric bicycles in major cities.
Those changes have caused widespread discontent and confusion among ordinary mainlanders. The decision on electric bikes is particularly harmful to the poor and goes totally against the government’s stated policy to promote green energy and cut pollution.
On Friday, the mainland changed tax rules so that online purchases of overseas consumer goods through cross-border e-commerce platforms are no longer classified as personal postal items but as imported goods subject to tariffs, value-added tax and consumption tax.
Personal postal articles carry a flat tax rate of 10 per cent if they are worth less than 1,000 yuan (HK$1,200). In the past, online purchasing agents repackaged products for mailing to take advantage of these lower taxes, undercutting traditional importers who have to pay much higher rates on the goods they bring in. The change will affect more than 5,000 e-commerce platforms, including those operated by Alibaba Group, which owns the South China Morning Post.
Taxing times in China’s online retail grey zone as new rules set to overhaul cross-border e-commerce industry
Officials claim the new rule is aimed at levelling the playing field for e-commerce platforms and traditional retailers and importers, but it’s more about what they see as “lost revenue” because of a booming industry.