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Taxes On Parcels. Who Started The Fight For Ukrainians’ Money And Did They Approach The Problem From The Right Side?

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Taxes On Parcels. Who Started The Fight For Ukrainians’ Money And Did They Approach The Problem From The Right Side? © Сгенерировано KREA по запросу ZN.UA

One of the first tax initiatives of the government in 2025 was the idea to abolish the €150 tax-free limit on commercial parcels from abroad for Ukrainians and introduce a 20% VAT rate starting at €0.

The initiative was expressed by Danylo Hetmantsev, Chairman of the Parliamentary Committee on Finance, Taxation and Customs Policy, who, citing the demand and even the authorship of several business associations, registered a draft law No. 12430, urging his colleagues in the parliament to endorse the idea.

But while MPs are still considering whether to support the initiative, a heated debate has broken out on social media.

On the one hand, Ukrainians are outraged, believing that the government is once again reaching into their pockets, depriving them of access to cheap goods. On the other hand, economic experts and business representatives have spoken out, demonstrating analytics and figures to convince everyone of the need for such taxation as a tool to protect Ukrainian producers and retailers.

The government, for its part, sees this initiative as generating tens of billions of hryvnias in budget revenues.

Postal operators and customs experts expressed their position, saying that the postal and customs infrastructure is not ready to administer such a tax and that the idea of shifting VAT payment to international marketplaces is unrealistic. Instead of money for the budget, we will get a collapse at the post office and customs, they say.

The situation is really tangled because, on the one hand, we are moving to the EU, where taxes are paid on parcels starting at zero euros. This is normal, and we are not going to get away from it.

On the other hand, there is a war raging on in Ukraine, during which online shopping has become, without exaggeration, a tool for supplying both the front and the rear. The volunteer movement, the production of drones and means of electronic warfare, the energy independence of Ukrainians and so on are all based on parcels from around the world. The introduction of an additional plus 20% VAT on all of this will mean a 20% reduction in efficiency and the need to raise 20% more donations.

And in general, is it worth starting the fight for the rights of white business from parcels? Is this really the main problem?

Let us try to take an objective look at this initiative from all sides, compare the facts and, taking into account all the pros and cons of the idea of zero taxation on parcels, understand the feasibility of introducing such a rule.

Why parcels have become a problem

 After three years of the war, the number of parcels is now 2.5 times as high as before the invasion, and their value has seen a fourfold increase, from UAH 32 billion in 2022 to UAH 120.5 billion in 2024.”

For Ukrainians, a parcel from abroad is no longer a miracle, but a normal part of life.

The technological and digital world has turned cross-border trade into a fast and convenient tool for contact between producers and buyers, so ordering any product from anywhere in the world is sometimes faster and more convenient than going to the nearest supermarket to buy groceries. And this is a given.

Three clicks on the website, payment and entering the delivery address — and in a few days, the courier knocks on your door with the coveted sneakers, vitamins or gadgets. It’s a pure thrill for online shopaholics, whose number is growing every year, and the “parcel” business has become a separate e-commerce sector.

The latest statistics on the importation of parcels into Ukraine gives an excellent idea of the scale of this phenomenon.

According to it, in 2024, Ukrainians received almost 73.5 million parcels worth more than UAH 120.5 billion.

The numbers look cosmic and tend not just to grow, but to double almost annually. For example, in 2023, 52 million parcels worth 62 billion UAH entered Ukraine, whereas in 2022, their number was about 31 million parcels worth 32 billion UAH. That is, after three years of the war, the number of parcels is now 2.5 times as high as before the invasion, and their value has seen a fourfold increase, from UAH 32 billion in 2022 to UAH 120.5 billion in 2024.

 

UAH 120 billion is almost three billion dollars that the country pays to foreign sellers and manufacturers and from which the state collects almost no taxes.

At least that’s what the initiators of the draft law are trying to convince us in, who. Relying on these figures, they are initiating the introduction of VAT on parcels starting from zero instead of 150 euros. Just like in the EU.

The argument looks solid, but let’s analyze these statistics and look at the real scale of the problem.

When the government says that the parcel tax is supposed to protect Ukrainian business, one has to ask what is meant by the term Ukrainian business?

Are we talking about buy and sell Chinese goods retail or a real manufacturer in Ukraine that produces value-added products and has real production facilities, not hangars for storing Chinese goods?

To begin with, the state has a good profit from more than half of this UAH 120 billion in duties and taxes.

Let’s take a look at the distribution of parcels by number and value.

Out of a total of 73.5 million parcels, 99% are low-cost parcels below the tax-free limit of 150 (72.9 million for almost UAH 59 billion). This is less than 50% of the total amount. The average cost of such parcels is UAH 800.

The remaining 1% in numerical terms (601,000 parcels) accounts for UAH 61.6 billion. The average cost of each parcel is approximately UAH 102,000, which is far beyond the tax-free limit.

Admittedly, those are interesting numbers.

It turns out that 1% of parcels in terms of money accounts for more than 50% of the total amount and consists of really expensive shipments that are taxed at a rate of 10% duty plus 20% VAT. That is, the state already receives its 32% of the UAH 61.6 billion. This is UAH 19.8 billion.

Now, by lowering the VAT threshold to zero, the government plans to tax the cheap segment of international shipments, which account for 99% of the volume and less than 50% of the value.

The taxation argument is conceptually correct because, as I said, in the EU this threshold is zero euros. In the US, to be fair, it is $800.

Türkiye, on the other hand, lowered this limit to €30 in 2024 and imposed safeguard duties of up to 60% on certain goods. This is the way the whole world is going, protecting the country’s economy and its producers, so we will definitely come to a zero rate as we move towards the EU.

And we have been following this path for six years now, even though a step back was taken from time to time.

Retailers have learned well how to lobby for their interests in political circles, but they also have to take into account the realities of a world in which they are losing the geographical exclusivity of access to the buyer. They have to fight for your money not only with aggressive marketing, but also with an appopriate price.

Back in the summer of 2019, after heated discussions in the Ukrainian parliament and the expert community, the limit was reduced from 150 to 100 euros. The business community demanded a reduction to 40 euros, but only 100 euros was agreed upon.

However, in the spring of 2022, during the war, the tax-free limit of 150 euroes was restored, and now they want to reduce it again, and radically at that — to zero euros.

The sudden change in the government’s position is due to pressure from businesses, which, in the form of various associations, found arguments and the right moment to raise the issue of protecting the economy from tax-free goods from Chinese marketplaces.

One of the letters from the business community published by Danylo Hetmantsev reads as follows: As a result of the meeting between the President of Ukraine and business representatives on December 27, 2024, the following decision was made... (see document).

Obviously, seeing the systematic growth in the number of online orders and the UAH 120 billion spent by Ukrainians, Ukrainian retailers decided to try to redirect the flow of this money from Chinese sites to their stores. They say, we sell the same things, but we pay taxes. Protect us. And the government plans to protect us. But is it the right time?

Up to 60% of the parcels are delivered to the front and rear, and the increase in their number is the result of the war, not of Ukrainians living in clover.

I mentioned at the beginning that parcels from abroad, mostly from China, are now supporting both the front and the rear. Most of the components for the production of drones and electronic warfare devices are sent in parcels ordered not only by volunteers but also by soldiers on the front line.

In the rear, it is on the parcels that the energy resilience of Ukrainians is built. Power banks, inverters, batteries and solar panels, electric heaters and gas burners, flashlights, etc... The list goes on and on, and these are mostly goods that are not produced in Ukraine, but are critically needed. And they are available in China and not for all the money in the world. Of course, you can buy them in Ukraine, but they are many times more expensive and from those who have built a whole business on the resale of these goods.

The increase in parcel volumes in 2023 and 2024 is the result of the war, not the luxurious life of Ukrainians. In percentage terms, it can be up to 60 percent.

Recently, a soldier I know ordered a 3D printer in China (at his own expense) to print shanks for dropping grenades from drones. It was brought by a postal operator to the frontline office of a delivery operator.

I think everyone has many such examples. All of them are about the needs of the front line or the security of the rear. If the approximate number of such orders is anything to go by — which it is — we can understand that the parcel tax at this stage is a so-so initiative.

So, let’s do the math.

From my old 2018 publication on parcels, I took the postal and express mail statistics from the State Fiscal Service for 2014-2017 and overlaid it with the statistics for 2022–2024. As a result, it’s clear how many parcels entered Ukraine:

  • In 2014, 3 million parcels worth UAH 7.7 billion (491 million) were delivered;
  • In 2015, 3 million parcels worth almost UAH 19 billion (781 million) were delivered;
  • In 2016, 1 million parcels worth UAH 33.6 billion (1.18 billion) were delivered;
  • In 2017, 29.2 million parcels worth UAH 39.8 billion (32 billion).

From these statistics, we can see that in 2016 and 2017, there was a kind of plateau in the number and value of parcels ordered by Ukrainians.

And these figures are comparable to the statistics of the first year of the war, as 31.5 million parcels worth UAH 33.5 billion entered Ukraine in 2022. This is nearly the same as in 2016 and 2017.

Of course, in 2022, thousands of parcels already arrived for the front and the needs of the home front, but at the same time, millions of Ukrainians left the country.

In 2023 and 2024, as we remember, the number of parcels and their value almost doubled annually, reaching UAH 120 billion and 73.5 million pieces. At the same time, the number of Ukrainians who left the country kept growing.

Of the 100 largest recipients of parcels, 80 people received 18,765 parcels in the first nine months of 2024. These are obviously commercial parcels under the guise of private shipments.

This may suggest that the increase in parcel volumes in 2023 and 2024 is the result of the war, not the luxurious life of Ukrainians. In percentage terms, this could be up to 60 percent. The figure is, of course, approximate, but not far from the truth.

It is proposed to lay a 20% VAT on this volume of “war parcels,” which looks very short-sighted because in this case we reduce the efficiency of using funds by 20%. We will need to collect 20% more donations, and they will most likely never come, so it is the efficiency that will fall.

In the summer of 2024, the government abolished VAT on imports of energy-generating and energy-saving equipment so that Ukrainians could provide themselves with at least some light and heat. Now, on the contrary, they are planning to impose VAT on part of this segment.

Statements that we have abolished import duties and VAT for drones and power generating equipment do not apply in this case because there is no tool to separate such goods in parcels.

Ukrainians who have learned to buy goods directly from China, the UK and the United States are a problem not for real Ukrainian producers, but for a business segment that is built on the scheme of reselling Chinese goods and wants to obtain a monopoly on this resale.

I consulted with representatives of postal operators, who said that according to the concept of the law, the 20% tax should be collected by the sender (Chinese or other online store), on which we should somehow impose an obligation not just to collect the tax, but also to start separating and segregating goods for military and energy needs from others. No one will be able to implement this.

Is this battery going to a drone or a toy car? How do you tell the difference when its the same battery?

Who is going to do it? That’s right. Nobody.

It is especially interesting to see how to impose such an exercise on China, which is already blocking our military supplies, particularly the aforementioned drones. And that will mean that we reveal what components we use in defense.

That is preposterous.

And what if sales are not made directly, but through intermediaries and sham companies for the sake of supply chain security? And what about equipment that we import not as a whole but in parcels as spare parts? So taxation cannot be avoided here.

Therefore, everything that goes in the parcels will be subject to VAT, and this VAT will be charged on the 3D printer for the shanks for the drones, on the battery and on the camera for an FPV drone. On everything.

It is up to the parliamentarians to decide whether to introduce the tax on parcels right now, rather than postpone it until the war is over, but the argument of providing parcels for the needs of the front and the energy needs of the rear should definitely be taken into account.

Who suffers from tax-free parcels — real producers or speculators?

When the government tells us, “We have to protect Ukrainian business with the parcel tax,” we have to ask what is meant by the term “Ukrainian business.”

Are we talking about “buy and sell Chinese goods” retailers or a real manufacturer in Ukraine that creates jobs, produces value-added products, exports them and has real production facilities, not hangars for storing Chinese goods?

When a Ukrainian buyer sees that the same product costs three to five times more in Ukraine than in China, why should he buy it here, from a dealer, rather than where it is cheaper?

With all due respect to Rozetka, Aurora, and Epicenter’s monopoly, this model of resale platforms for mostly Chinese goods cannot be put on a par with businesses that actually produce something and really need protection from the state.

For example, is it possible to compare the Aurora chain of stores and the Yaroslav chain of branded stores, which, unlike the former, do not sell prefabricated Chinese goods but exclusively light industry goods and pasta from their own pasta factory?

Both companies are businesses. They both create jobs, pay taxes, invest in marketing and so on. But Yaroslav develops the economy and production of Ukraine by investing in equipment and production facilities, while Aurora develops the economy of China by sending billions of hryvnias to its budget.

As it turns out, the problem of parcels from Ukrainians who have learned to buy goods directly from China, the UK, and the United States is not so much a problem for real Ukrainian producers as it is for a business segment that is built on a scheme for reselling foreign goods and wants to obtain a monopoly on this resale.

It is this business that is lobbying for the introduction of taxes on parcels, defending its model of operation, with the voices of various business associations because they do not want Ukrainians to buy cheaper there. They want Chinese goods to be more expensive here.

And this is not very fair to the buyer, considering the margin with which Ukrainian platforms do this and the lack of economic borders for goods. I’m talking about the ability of Ukrainians to see the real value of goods from the manufacturer and buy them.

Here are a few examples for your understanding.

Here is a simple question: Why should a Ukrainian buyer, upon seeing that the same product costs three to five times more in Ukraine than it does in China, buy it here, from a dealer, rather than where it is cheaper?

What should he overpay for, and why do those who make money on the resale of such goods want to limit it?

It seems that retailers have learned to lobby for their interests in political circles, but they must also take into account the realities of a world in which they are losing the geographical exclusivity of access to customers. And they have to fight for your money not only with aggressive marketing, but also with an appropriate price.

And it is very difficult for them to compete here. That is why the idea of taxes on parcels came up.

Another concept of fighting for the interests of white business is not about where they steal but about where it is easier to collect these taxes. From peoples parcels.

The problem is not where they are looking for it

Let us be honest. The concept of taxes on parcels does not solve the issue that this topic is being wrapped up in, saying that “it's all about protecting business.” The real problems of honest merchants are not peoples mail, but industrial smuggling at the borders.

Full trucks of Chinese shoes, mobile phones, Turkish jackets and pants, Chinese dishes and jewelry, fakes of world brands and household chemicals. When all of this comes to Ukraine in caravans without paying taxes, spreading not only to markets but also to shopping centers and even boutiques.

At the same time, the state does not see taxes on these goods either during fraudulent imports or during equally fraudulent sales. Yet the currency is flowing out of the country like a river. And this is truly a national disaster.

Do you think that the Ukrainian shoe manufacturer Mida will suffer more from a pair of branded shoes I ordered from Europe or from shopping centers filled with stores selling Turkish and Chinese shoes smuggled through customs and sold by individual entrepreneurs at a lower cost than the cost of legally producing a pair of shoes in Ukraine? I think the answer is obvious.

If you are interested, you can check out my extensive pre-war material on shoe production in Ukraine for insight.

Tens of thousands of commercial parcels travel from buyers to the EU as second-hand items and pass through the border on paper as private shipments from one person to another. How to catch it?

Electronics are a total disaster.

In 2024, with the involvement of all law enforcement agencies, together with the tax authorities and MPs, under the supervision of the US Embassy, we tried to overcome the illegal Apple market in Ukraine.

And here is how we managed to overcome this challenge: from September 20, when iPhone16 sales started, to mid-December, 17,000 iPhones were officially imported to Ukraine. At the same time, 101,000 phones were activated by mobile operators.

And if only 17,000 out of 101,000 iPhone16s are officially imported, it means that 84,000 activated devices were imported and sold in Ukraine illegally. 80% of iPhone16 are from the shadow economy. And this is a brand that serious people are defending. Eventually, none of the distribution networks for illegal iPhones has been closed. All of these Yabko, Stylus, iStore and others continue to operate.

And now imagine the volume of illegal, or significantly undervalued, Chinese electronic waste? No one can imagine it because to count it, someone has to care about this problem. And who will care if everyone is just making money on it?

Therefore, the next concept of fighting for the interests of white business is not about where they steal, but about where it is easier to collect these taxes. From peoples parcels.

Customs is not ready to solve the postal problem

Let’s go back to the very beginning of our article and recall the statement that taxation of parcels is a good initiative in the long run, and we cannot run away from it. Protecting domestic economic borders from the growing volume of foreign goods is a necessary thing that is being implemented everywhere. But, firstly, we should start not with this, but with the previous section, i.e. smuggling and customs. Secondly, the implementation itself is fraught with technical difficulties.

This step requires building the appropriate customs infrastructure, which, unfortunately, is still missing in Ukraine. We are talking about a modern customs office with the latest control systems and customs officers who are able to handle such a flow of parcels.

Have you ever wondered why exactly 150 euros is the threshold for tax-free parcels?

This is the limit of unprofitability for the state to conduct an inspection, accompany the customs clearance of a parcel, and waste the customs officers time. That is, all these actions for parcels costing less than 150 euros will bring the country losses, not revenues, and will cause a collapse.

Why is this so? Because even though automation and digitalization are developing at our customs, it is still far from being able to handle such an array of parcels at low cost.

Proponents of reducing the limit to zero argue that all these problems are no longer an issue since their idea of taxation is based on the EU’s Import One Stop Shop (IOSS) system, where international trading platforms and stores pay VAT for buyers on their own by including it in the price of goods. This relieves European customs of the burden of checking millions of parcels and manually administering VAT payments.

It is a great idea, but we need global retailers to agree to it. What will we do if they dont? Will we pass a law and then think about how to implement it? For example, Amazon says no. What is our plan B? Shall we ban it in Ukraine?

What about small shops and websites? What about them?

It is unlikely that they will agree to the proposed format of cooperation. Why should they be obliged to pay our VAT? So we will have to do all the checks manually.

Today, 92% of Ukrposhta parcels are under ten dollars. Can you imagine that to look after each one we would need one customs officer and two postal employees, a dozen sheets of paper and hours of time and checks? And for what? To tax fish hooks for three dollars and charge 20 UAH VAT?

It will paralyze the system.

The former head of the State Customs Service, Max Nefiodov, described this problem very clearly, noting that there is currently no mechanism for checking the value of goods in parcels, and that manual checks of each parcel, which customs officers will be required to perform, will make life hell for both customs and buyers.

A box of shoes has arrived. How much are these sneakers worth if there is no receipt in the package or the price is clearly too low? Customs officers need to check every parcel because an error in value will reduce taxation, which means losses to the state and a direct path to criminal liability.

How many parcels did we have there in 2024? More than 73 million? We open each one and check it. Collapse...

However, there are many other pitfalls in the mail subject. For example, the real value of the goods is not indicated or new goods are sent under the guise of used goods.

Tens of thousands of commercial parcels travel from buyers to the EU as second-hand items and are documented as private shipments from one person to another. How to catch it?

The Ukrainian Business Council states that out of the 100 largest recipients of parcels, 81 people received 18,765 parcels in the first nine months of 2024. These are obviously commercial parcels under the guise of private shipments.

Some Chinese sellers do the same thing, indicating a fictitious, understated price at your request or making private shipping as well. And it is almost impossible to prove the opposite, as is taxing all this.

And what about postal smuggling?

In 2018, I published unique data: I requested from the Polish Ministry of Finance the number of parcels that Polish operators sent to Ukraine and the SFS data on how many parcels arrived in Ukraine from Poland. You will be surprised, but in 2017, Poles sent us 15 million parcels, and 45.5 million parcels arrived in Ukraine from them. That’s three times as many!

How is this possible? It’s called “postal smuggling” when a truck of commercial goods leaves Poland for Ukraine, and at the border a package of documents is placed under it stating that it is just people’s parcels. And since postal cargo is not checked at the checkpoint, the truck crosses the border without customs clearance. Does it sound nice?

I don’t know to what extent this scheme still exists, but given the number of participants in the register of postal operators, of which there are more than 200, anything is possible.

Conclusion

Let me repeat for the third time that the topic of taxing parcels starting from zero euros is a story that we will definitely introduce. There is no way to avoid it. But we need to do this taking into account the realities of the war, the state of affairs at the customs and the priority of the problems.

First, the reform of the customs authorities, ending the war, digitalization of postal operators and the customs, overcoming industrial smuggling and chaos with the sale of illegal goods and only then a step towards online shopaholics and the introduction of taxes on parcels.

The introduction of the tax itself should be phased in, through preliminary agreements with trading platforms and their willingness to accept VAT, with a possible gradual reduction of the tax-free amount. 150–100–50–0. To make it convenient for buyers, customs and postal operators. Then the state will also benefit.

Read this article in Ukrainian and russian.

 

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