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The government wants to again increase duties on imported electronics. Is there a way out

It seems that our deputies have no iPhones or laptops. Or maybe they don’t care how much they cost - $ 500 or $ 1500. RBC and Vedomosti report that on the sidelines they again began to talk about increasing import duties. Andrei Belousov, Putin’s assistant on economic issues, wants to send such a proposal for approval to the president. Putin also does not mind, because this "will help the domestic producer." How much will prices increase in online stores, what do experts say, and what choice do we have?

















What happened?



RBC writes that Andrei Belousov, spoke in favor of raising duties on imported electronics. According to the presidential aide, such a decision can be made by the Russian authorities even without regard to WTO norms. New duties on imported gadgets approves the Ministry of Economic Development, and then the proposal will be sent to the EEC (Eurasian Economic Commission). The Russian government will not have to wait for the EEC decision, because the duties, according to the presidential aide, can be introduced “temporarily” and then simply extend this “temporary” period until Russia has its own alternatives to iPhones, MacBooks and other electronics.

















Belousov admits that unauthorized increase in duties differs from the norms of the World Trade Organization, and other countries do not do that. However, in the conditions of anti-Russian sanctions, such a move, in his opinion, is quite acceptable. “The WTO is based on well-known principles that underlie the relevant agreements, the application of sanctions disregards these principles completely, simply completely. And today, it is rather strange for us to even look at our commitments, when in relation to the Russian Federation all the basic principles of the WTO are set aside, ”Belousov explained.







Were there any precedents?



There are no specific figures in the Belousov proposal. But the topic has been discussed for a very long time, and previous authors had their own calculations. So, in October 2014, the association of the 20 largest Russian retailers, ACIT, complained to the Ministry of Finance about the lack of duties on foreign goods, making their prices uncompetitive compared to Western stores and “impoverishing the Russian budget” of $ 400 million a year.

















At the same time, there was a proposal to reduce the duty-free importation on purchases to € 200 from the current € 1000. The law seemed stupid and meaningless (in the end, the budget and trade balance in the Russian Federation are surplus), but this did not prevent it from being adopted . As a result - expensive purchases from abroad, we will import duty free only for a year, until the middle of 2018. The threshold will be further reduced to € 500, and a year later - to € 200. Taking a fee from smartphones, laptops and video cards from Amazon, B & H and NeweGG will be much less profitable, and many customers who have previously saved by buying directly from major world resources will be forced to switch to Russian stores. Having got rid of the main competitors, they will be able to raise prices even more, and the current two-fold difference in the cost of devices may seem to us even more flowers. It will also affect foreign shopping lovers who have bought branded clothing and handbags directly from manufacturers. The difference in price with Russian boutiques will be even greater.







By the way, as we remember, Dmitry Medvedev is one of such lovers of foreign shopping. As in 2014, Humpty Dumpty hackers found out, he buys his clothes and shoes directly from Western stores. So from 2018, our prime minister will also have to pay a fee to walk in fashionable Nike sneakers and Beams Plus checkered shirts. Will he not buy clothes of domestic production?







As for duties on electronics. Earlier, in 2016, a similar proposal to Putin was put forward by the governor of the Pskov region Turchak. He was very concrete: according to his calculations, the duty should be increased four times, from 14% to 60%. According to Turchak, "this will drastically bring our products out of the shadows, make them popular and allow us to develop high technologies." They did not accept the law then, but now they have returned to this discussion, and in the highest circles. In fact, it only remains to get approval from the president. And he, as we remember, is not at all against such an idea. Putin himself proposed to introduce VAT on purchases in foreign stores. If there is political will, the law on increasing duties on electronics can be passed in the coming months. There is not a single political force or large organization defending the rights of Russian citizens to freely buy for themselves what is more profitable and better.







How will this affect prices?



To speculate in figures before the official submission of the bill to parliament is a thankless task. But Alexander Ivanov, Chairman of the National Association of Distance Trade, gave his comments on this issue:







“I am trying to simulate the consequences of restrictions and prohibitions. In principle, the restrictions will be the following: we will have a sharp rise in the cost of logistics with all the ensuing consequences, and all companies will get a lot of problems because of this. Cheap goods are sold, by definition, better than expensive ones; goods for 1 thousand sell more than for 10 thousand. The less they buy, the more expensive the transport ... "


“What else is silent about - the volume of the disaster. [Online trading] - this is 0.7% of the total retail turnover in the country, this is zilch. People don't know about her. We have a cumulative volume - 1.7 online sales per capita. For you to understand - in China, 16 online sales per year. South Korea and Britain - about 50. We really have no competition, nothing like that. Those who know, and who have money - take abroad. But this is a fraction of a percent. And the restrictions will affect everything ... "

Natalia, one of the regular customers of foreign online stores, told the BBC Russian service about her attitude to the question:







“In most cases, we buy clothes, shoes, cosmetics. Cosmetics is two to three times cheaper than in retail. Clothing branded cheaper than in stores - and a half times. I buy something three times cheaper than you can buy here at the pharmacy. For clothes - you can try on something here, and buy on the Internet. Especially the shoes. Again, saving time is much more rational than buying here. It will be a pity if they push through [the law]. ”

Vladimir Dolgov, the head of the Russian office of the online auction site eBay, considers the constant initiatives of officials to restrict purchases strongly unbalanced. One of the reasons is that citizens of Russia can now legally transport goods up to € 10,000 through customs. If they don’t take a fee for these goods, shuttle traders of electronics may appear, personally transporting goods across the border. More precisely, they already exist, but their number will increase significantly. But the budget and Russian producers will not receive the expected profits.









Infographics from the organization of retailers AKIT







The same opinion is shared by Anton Guskov, chairman of the Association of Manufacturers of Household and Computer Equipment. He believes that the proposal of the adviser to President Belousov will lead to an elementary increase in prices, but will not help the development of Russian production. Now, Russian online stores, when importing, are forced to pay duties, customs clearance fees, and then also VAT (and this does not take into account the rental of premises, remuneration of employees and so on). If the duties increase, the prices are likely to increase by the size of the duty + another 5-10%. Reduced competition will also increase the cost. Those devices, which are now in Russia and a half to two times more expensive than in America, will grow in price by another 20-30%, or more.







Are there alternatives?



The direction of travel is chosen and the train does not stop. Yes, no one wants to stop him. The government needs to find an additional resource for the budget, and electronics sellers need to get rid of their main competitors, which cannot be defeated in a fair fight. Obviously, Amazon and eBay prices will always be lower than any Russian store. The only option is to make people not aware of such ways of buying or could not use them.







None of the large and influential groups defends the users. We all will pay more - and this is only a reason for happiness (from the same series as “the rate of 60 rubles per dollar is good, because it’s easier for us to fill the budget”). In 2018, the limit for self-duty-free purchases will inevitably be reduced, and prices for imported electronics will probably be raised even before that.









The only positive moment is that this has not happened yet :) And there is still time to buy cheaper. You can freely stock all that I wanted, so you don’t have to buy two or three times more expensive. This is especially true of laptops, tablets, smartphones and PC components. Most often they are taken in Amazon , B & H and NeweGG . So far, the goods are imported without duty, if their estimated value is less than € 1000 per month. That is, you only have to pay for shipping, there are no hidden fees.







Some current examples are:









Draw your own conclusions.







PS If, nevertheless, decide to order something in the USA - Pochtoy.com gives a good bonus. Follow the link , register - and enter the code GEEKTIMES in your office to get into the account $ 7 for the delivery of purchases from any American online stores. After a year this possibility may not be.







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