Package prices will rise: co-owner of Nova Poshta sounds the alarm over VAT implementation

New rules for taxing international shipments may change not only their final cost for buyers. Businesses also fear added pressure on customs and the postal-logistics system.

What will change after the introduction of VAT on parcels

In Ukraine, VAT will apply to international parcels up to 150 euros in value. The novelty could have consequences in several areas at once—from the cost of purchases to the work of customs, says co-founder of Nova Poshta Volodymyr Poperešniuk.

The government managed to push through this economically harmful tax after all. I sympathize with everyone, because taxing parcels will affect almost everyone,

– Poperešniuk noted.

According to his forecast, after the tax is introduced, Ukrainians may face two main consequences:

the cost of international parcels may rise;

the delivery times may increase.

Poperešniuk believes this will lead to additional costs for consumers. He also notes that imported goods often do not have full-range analogues on the Ukrainian market.

Affecting Ukrainian retail and customs

In the opinion of Nova Poshta’s co-owner, the consequences of the new rules may go beyond the postal market.

If Ukrainians spend more money to receive international orders, there will be less money left for other purchases. He says this could create additional problems for Ukrainian retail.

The businessman also links stronger tax control with the risk of increased illegal import of goods.

A collapse at customs will occur due to tens- or even hundreds-fold increases in workload, so logistics will suffer. And not only for postal operators; this will affect all carriers, which in turn will impact the growth of smuggling,

– Poperešniuk says.

In his view, if the formal processing of small international purchases becomes more complicated and expensive, some operations may move to the shadow economy. Poperešniuk believes this will inevitably lead to an increase in the volume of smuggling.

Recall that the new rules will directly affect purchases on foreign marketplaces such as Temu and AliExpress. It is the operators of such platforms who are responsible for calculating and paying the tax.

Because of this, goods from international online platforms may become more expensive by the amount of VAT if this tax was not previously included in the price.