A course towards higher prices: is there a compromise on the issue of lowering the duty-free threshold for importing goods?

There is very little time left until the threshold for duty-free import of foreign goods automatically drops from 1,000 euros to 200. The carriage will turn into a pumpkin on April 1, but officials still can’t come to an agreement. The FAS, the Ministry of Industry and Trade and the Ministry of Digital Development are in favor of maintaining the threshold of 1,000 euros, while the Ministry of Finance and the Ministry of Economic Development are in favor of reducing it to 200 euros. And, according to the acting head of the Federal Customs Service (FCS) Ruslan Davydov, Russia does not need any duty-free trade thresholds at all and only distorts the real picture of foreign trade. True, for some reason the official does not specify how this picture will affect ordinary buyers.

Reducing the threshold for duty-free imports is beneficial for the state. More taxes means more profit for the treasury. But is the “game” worth the candle? Lenta.ru recently calculated that in fact the share of customs duties paid by individuals and customs duties in the Federal budget is only 0.4%. Of course, if you convert the interest into money, it turns out to be impressive, but the number of negative effects that the country can ultimately receive more than pays for these values.

Experts predict that electronics alone will rise in price by 10-13%. The largest networks – MVideo, DNS Citylink, will immediately take advantage of the lack of competition with foreign goods, the delivery of which is now offered by all Russian marketplaces. Gadget distributors have already begun to warn that the cost of devices is about to rise. Based on the results of 2023, modern technology has become even less accessible to ordinary Russians. As Kommersant writes with reference to domestic retailers, electronics have jumped in price by 10-15% over the year. We are talking specifically about consumer gadgets – smartphones, laptops and tablets, which have almost no Russian analogues comparable in price and capabilities. And, apparently, the situation will only get worse.

Distributors blame the rise in prices of equipment in Russian retail, including on the Houthis – modern “pirates”, which are a paramilitary group of Shia-Zaydis operating in Yemen. Last year they actively attacked merchant ships in the Red Sea, causing logistics costs to rise.

It is difficult to judge to what extent the problems in the Gulf of Aden have really affected pricing in the niche category of smartphones in Russia, but what is certain is that the duty on smartphones has been reduced to 0% since last year. Conversations by RAEC that domestic producers, etc. “white” importers who provide certification of smartphones and encryption for the benefit of Big Brother are not wealthy – if necessary, you can enter an iPhone worth 10 thousand euros in accompanied baggage by air. Moreover, Customs officers find it difficult to convincingly prove that 10 smartphones are a commercial shipment, and not gifts from the person who arrived to his large family. Let us remind you that passengers arriving from the EAEU countries, in principle, are not searched in accordance with the Treaty on the EAEU.

In discussions about lowering duty-free import thresholds from 1,000 to 200 euros, supporters emphasize the importance of caring for domestic producers. But, unfortunately, many more general consumer goods are simply not produced in the country in quantities that can meet the demand of Russians. And the volume of Russian retail is more than 47 trillion rubles, and the volume of orders from Russians on the Internet with delivery from abroad is 350 billion rubles. And will 0.7% of the total retail turnover in Russia really ruin Russian industry, for the development of which the President ordered to allocate trillions of rubles?

The most important thing in this story is ordinary citizens. The country is big, there are different opportunities and needs everywhere. So, for example, Kaliningrad. A unique territory, completely surrounded by foreign states. What should this region do?

Without a land border with the main territory of Russia, the Kaliningrad region is forced to come up with special regimes to maintain business activity. Since last year, an experiment has been successfully carried out on the movement of goods for personal use within the framework of Internet commerce to the rest of Russia, which was initiated by Governor Alikhanov.

We are talking about duty-free trade in goods for personal use exported from the territory of the Kaliningrad region to the rest of the territory of Russia and the EAEU. In essence, the region is one large Special Economic Zone, in which the customs procedure allows the import of goods without duties. But to export any product, even if it is made in the region, to the rest of Russia, you still need to prove to the customs authorities that the product is not foreign, which is not easy to do. Or pay customs duties and taxes.

After the start of the SVO, in order to stabilize the economic situation in the exclave, an experiment was launched on duty-free Internet trade in goods for personal use exported to the rest of Russia. Kaliningrad legal entities, individual entrepreneurs and, importantly, self-employed people can sell and send goods located in the region, including imported ones, even if they have foreign status, to buyers in “big” Russia without paying customs duties and without collecting documents confirming the status of goods. Key conditions – the cost should not exceed the duty-free import rate, which is currently set at 1000 euros.

It turns out that, just like in 2014, when the first sanctions hit Kaliningrad the hardest, today the region is in the most unpleasant situation. The question arises – what is more important for the Government: 0.4% of the budget revenue or the well-being of a million citizens of the country who already live far from their homeland?

Of course, you can make an exception only for the amber edge. But this will not be a way out of the situation, but rather a reason for companies to abuse their rights – all gadgets will go to Moscow from Kaliningrad. And, of course, there will be more “pirates” along the way, whose actions will cause the cost of logistics to rise even more.

It is possible to find a compromise. For example, at the next EEC Council, which will be held in the first ten days of April, make a decision on a gradual reduction of the duty-free import threshold: leave the duty-free import threshold for goods purchased online with delivery to MPO at 1000 euros until the spring of 2025 – just for the time being the operation of the experiment in the Kaliningrad region, then – lower the threshold to 500 euros until the spring of 2026, so that citizens get used to the changes, from the spring of 2026 – return 200 euros. But will the choice fall on the welfare of the residents?