Chinese Government Rows Over Personal Import Tax

by Mary Swire, Tax-News.com, Hong Kong

16 November 2010

The Chinese ministry of commerce has taken to task the customs authorities for supposedly violating World Trade Organization (WTO) rules in imposing excessive duty on personal imports of electronic products.

A ministry letter to the General Administration of Customs (GAC) claims that the 20% customs levy on certain electronic goods brought into China by individuals is excessive and must be waived in order to comply with China's international commitments.

Huang Yi, head of the supervision department of the GAC, responded on China National Radio that purchases over CNY5,000 (USD750) were taxed at 20% in accordance with international norms.

The GAC had issued a notice on August 19 regarding the tax-free limit, but there have been many complaints that items costing much less than the limit had been taxed as if their value had been higher, because mainland retail prices were significantly higher than in Hong Kong.

The smuggling of iPhones and iPads from Hong Kong to China is said to be prevalent because of this price differential.

According to China Daily, the ministry of commerce had complained that the 20% duty on personal imports of iPads was too high given that import tariffs on computers was zero and the duty on commercial imports of the Apple iphones was 17%.

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