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Unexpected! The UK will increase taxes by 25% due to the cancellation of exemptions | Maritime export logistics
May 02,2025
British Finance Minister Rachel Reeves recently announced that the UK will review the tax system for imports of low-value goods in response to complaints from retailers.The system allows imported goods worth less than £135 to enter the UK market duty free.However, as cross-border e-commerce has boomed, the policy has sparked a backlash from local retailers.
Local retail giants such as Sainsbury's and Next have expressed concern about the impact of low-priced imports, which they say are undermining the competitiveness of local retailers. The chief executive of the British Retailers Association welcomed the policy review, arguing it would create a level playing field for local retail.
However, the policy adjustments have also raised concerns among SMEs. The body representing SMEs noted that the elimination of tax exemptions could lead to a 20 - 30 per cent increase in the cost of imported goods, which would affect pricing and profit margins.
The UK's policy review is part of a global rollback of tax exemptions for low-priced goods. Earlier, the US Trump administration cancelled the T86 tariff preferential policy, and the EU also said it would cancel the tariff exemption for low-value goods below 150 euros. This trend suggests that countries are re-evaluating the pros and cons of tax-free policies for low-priced goods.
Southeast Asian countries are also adjusting their policies. Malaysia will eliminate the "mini exemption" policy from 1 January 2024, imposing a 10% low-price goods tax on goods worth less than RM500. Thailand will eliminate the tax-free policy on goods sold for less than 1,500 baht from 5 July 2024 and impose a 7 percent VAT. Vietnam has imposed customs duties on imported goods worth less than 1 million Vietnamese dong (VND) since February 18, 2025.
These policy changes have had a profound impact on the cross-border e-commerce industry. Cross-border platforms that rely on low-cost goods, such as Amazon, eBay, and Shein, may face higher operating costs. In 2023, 1 billion products, worth $54.5 billion, will benefit from the UK's duty-free policy, which could lead to significant changes in sales strategies for these platforms.
Although the policy change brings challenges, it also provides cross-border e-commerce enterprises with an opportunity to transform. Enterprises can achieve high quality development in the new policy environment by improving product value-added, optimizing supply chain management and strengthening brand building.
Although this change will bring short-term pain, in the long run, it will push the industry towards a healthier and sustainable development model, and help enterprises make the leap from "Made in China" to "Made in Chinese" brand.
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