FX.co ★ Japan Mulls Tax on Small Parcels

Japan is evaluating potential amendments to its tax exemption regulations for small parcels, as reported by Bloomberg News. This reconsideration could impact parcels from Chinese e-commerce entities such as Shein and Temu. The suggested amendment involves imposing a 10% sales tax on goods that are currently exempt under the existing JPY 10,000 threshold. This policy review by both the Cabinet Office and a Finance Ministry panel addresses concerns about ensuring fair market competition and curbing the rising misuse of the exemption, including the import of counterfeit products and illegal substances. Japan's move aligns with recent adjustments made by the U.S., EU, and UK, which have tightened regulations surrounding cross-border e-commerce. Should this amendment be adopted, it could assist in recuperating tax revenues lost from millions of digital transactions.