According to foreign media reports, Japan’s Ministry of Finance is considering reviewing the duty-free policy for small parcels, including strengthening the review of duty-free channels used by cross-border e-commerce.

The Japanese Cabinet Office said that a government tax expert group discussed the problems existing in the current duty-free policy for incoming small parcels last week. They explored issues of fair competition and whether the channel might become a potential hidden danger for the inflow of illegal drugs and counterfeit goods into Japan.

Currently, Japan exempts import tariffs and consumption tax on imported goods worth less than 10,000 yen (about 500 RMB). It is reported that another group established by Japan’s Ministry of Finance is also studying similar issues.

According to Japan’s tax reform plan, it is expected to formulate detailed new tax policies by 2026. Before that, the import duty-free policy will continue to be implemented. This is also because considering that suddenly increasing taxes may bring a surge in workload to customs departments, so a certain transition period is needed.

Analysts point out that if Japan modifies the duty-free policy for small parcels, then small parcels containing products purchased from Shein and Temu shipped to Japan may need to pay Japan’s consumption tax – the current consumption tax rate is 10%.

Japan’s Finance Minister told reporters on Tuesday, “Regarding the review of exemptions, no decision has been made yet. But we will continue to consider this issue while paying attention to overseas cases and their impacts.”

It is understood that Japan is the world’s fourth-largest e-commerce market. Since 2018, the number of small imported goods in Japan has shown a significant upward trend, especially since 2020, the growth has been explosive. Last year alone, Japan imported 169.66 million pieces of small duty-free goods, with a total value of 425.8 billion yen, a year-on-year increase of 5 times.

Behind the large number of small imported goods, Chinese cross-border e-commerce platforms have once again become the “main force”, especially comprehensive cross-border e-commerce platforms like Temu and fast-fashion giant Shein.

Currently, in addition to the US and Japan, some European countries are also considering adjusting the duty-free policy for small parcels.