According to statistics from the European Commission, 5.8 billion duty-free, low-value e-commerce parcels entered the EU last year, a 26 percent increase from the year before. These staggering figures underscore the necessity and legitimacy of countermeasures.
From July, the EU would be imposing a 3 euro (US$3.56) processing fee on all low-value parcels as a temporary measure, before the implementation of a new system that would abolish duty-free exemptions for parcels that have a declared value of less than 150 euros and are sent directly to consumers.
With the rise of Chinese e-commerce platforms, the long-standing duty-free treatment for small parcels has been exploited ruthlessly: More than 90 percent of such parcels come from China, and their volume continues to expand wildly.
The European Commission has been reviewing the abolition of the low-value parcel exemption for three years, initially planning to implement a full-fledged taxation system in 2028.
Yet, as the dumping of ultra-low-priced goods has intensified, a flood of duty-free parcels has hit brick-and-mortar retail channels and the broader labor market hard. Faced with these mounting challenges, the EU has been compelled to act ahead of schedule and impose the 3 euro customs duty until a permanent solution is in place.
The pressure on the EU is closely linked to developments across the Atlantic. In late August last year, US President Donald Trump took drastic action by fully abolishing the duty-free exemption for parcels valued under US$800. Daily parcel volumes immediately plunged from 4 million to 1 million. Chinese retailers subsequently redirected their efforts toward the EU market, forcing an institution otherwise known for its slow pace to take unusually decisive and sweeping action.
Thailand faced a similar challenge and adopted equally tough measures. Beginning on Jan. 1, Bangkok abolished the duty-free exemption for parcels valued below 1,500 baht (US$47.46). Consumers purchasing overseas goods online are required to pay a 7 percent value-added tax and tariffs of up to 30 percent, which is expected to raise the prices of imported apparel and fashion accessories by 20 percent to 30 percent.
While the new tax regime appears neutral, its primary target is undoubtedly China. The policy is projected to generate 30 billion baht in annual fiscal revenue.
Last April, Minister of Finance Chuang Tsui-yun (莊翠雲) pledged to consider adjustments to the exemption rule for parcels under NT$2,000, which allows up to six duty-free shipments every six months. Yet, concrete progress on reform has been slow, raising public suspicion about hidden obstacles in play.
Chuang last week told the Legislative Yuan that there are no plans to abolish the duty-free exemption for low-value parcels. The policy considerations behind this apparent reversal warrant a full and transparent explanation to the public.
Chen Yung-chang is a freelance writer based in Taipei.
Translated by Gilda Knox Streader
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