Caution urged in lowering duty-free limit for overseas direct purchases


The government’s move to lower the ceiling for duty-free overseas direct purchases from the current $150 (203,385 won) bucks the global trend of free trade, undermining the country’s policy consistency, according to a tariff policy expert, Friday.Local consumers seeking cheaper goods in a globalized market is an expected course of action, as propelled and accelerated by inflation, said Ko Tae-jin, a professor of international trade and commerce at Kyung-in Women’s University.Ko believes that government intervention to shift the burden of rising costs onto local consumers in a short-term measure to ease hardships of small local businesses will erode their competitiveness over the long haul.“The government policy priority should be placed on ensuring the safety of goods, not overly protecting local businesses,” Ko said.The recommendation comes on the heels of Thursday’s announcement of a plan to consider lowering the $150 ceiling. The figure stands at $200 for goods imported from the U.S.

A prime minister-led task force said the measures merit deliberation, given the spike in complaints from local small businesses of explosive market expansion by Chinese e-commerce titans – AliExpress and Temu – defined by their aggressive marketing campaigns and low-pricing.Small businesses say their revenues continue to plunge, scarred significantly by exemptions of tariffs and value-added taxes for up to $200 worth of goods manufactured overseas. However, the lowered ceiling would translate into higher costs for consumers, an undesirable development from a longer-term tariff policy perspective, Ko said.“Free flow of goods and services has been and will continue to be a global norm, as guaranteed by free market principles and free trade,” he said. “The government’s attempt to interfere with market supply and demand by building up protective walls only makes local businesses grow weaker, with consumer choices and welfare at risk.” Proactive government steps are warranted only if the safety of consumer products come under threat, he added.

“Parents of young children certainly want to offset their reduced purchasing power with cheap toys made overseas, but not to the extent that the their safety is questioned,” he said. “Harmful substances found and left unregulated is the only instance when the government should promptly step in.”Lee Hyung-chul, director of customs policy at the Ministry of Economy and Finance, said the issues will be considered in the context of cost and benefit of the potential revision as well as implications for the country’s small businesses.“We will address concerns of reverse discrimination raised by small businesses against their global peers, review similar offshore cases and collect public opinion.”Japan and Taiwan offer exemptions of tariffs and value-added taxes for purchases lower than the ceiling. EU member countries, the U.K. and Australia levy value-added taxes. The 온라인카지노 EU also plans to levy tariffs starting in 2028.

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