Overseas shopping has begun to cause major losses in the economy. It has been reported that around 60 million commercial products, including 26 million from China, have entered Turkey under the status of letters in 2018. The value of these products has been reported to have reached approximately TL 20 billion. This “individual import system” threatens the retail sector and affects the economy as it leads to tax losses and current account deficit. Turkey has now rolled up its sleeves and is working on a three phase plan to prevent tax loss originating from informal trade.
Today, even the products at a price of 50 cents purchased from the online shopping sites such as Amazon, Aliexpress and Gearbest are being delivered to the buyer in just three days and no tax is being charged for that product. Turkish authorities charge customs tax of up to 20 percent on orders coming from abroad if the declared value of the package exceeds 22 euros ($25). If the sender country is a member of the European Union, customs tax of 18 percent is being charged, while the same figure stands at 20 percent for other countries.
When the amount of purchase from Amazon exceeds 22 euros, customs tax is automatically added to the price. There is no such application for purchases from Aliexpress and Gearbest. If the purchased products are examined by customs officers when entering Turkey, a tax is charged. Otherwise, it comes to the buyer’s door without tax.
Experts say the biggest loss in this area are products with a value below the 22 euros. The said individual import also impacts Turkey-based e-commerce sites. For instance, Koray Öztürkler, corporate communications and relations group president at Hepsiburada the Turkish e-commerce giant, said there was serious tax loss
originating from the products below 22 euros. “Chinese companies are packing the product of 100 euros as its value is below 22 euros,” he noted. On the other hand, Union of Chambers and Commodity Exchanges of Turkey (TOBB) E-commerce Council Member Cenk Çiğdemli said, “if unfair competition is lifted, the value added of the sector will also increase.”
Many countries around the world are also discussing the issue of taxation on online trade and acquisitions. Last month, Canada Tax Office experts prepared a report for collecting taxes from Netflix and other e-commercial sites. A change in the tax system was proposed. India has also applied for e-commerce issues to be included in the agenda of the World Trade Organization (WTO) meeting. Tax evasion lawsuits and cases in the European Union and the U.K. continue.
According to information received, work is being carried out on a three phase plan for the taxation of informal trade, which reaches a value of TL 20 billion a year. In the first phase, it is being projected that the Turkish Post and Telegraph Organization (PTT) will be turning to the fast cargo system in this area and all traffic will be inspected by the Trade Ministry. In the second stage, the lifting of tax exemption for sales below 22 euros will be a matter of subject. In the final stage, the tax difference between individual imports and corporate imports will be minimized.