PRESS: Russian online retailer group offers sales tax instead of VAT

MOSCOW, Nov 22 (PRIME) -- Russia’s National Association of Mail Order and Distance Selling Trade (NAMO) has suggested introducing a sales tax of 8–10% instead of imposing the value-added tax (VAT) on foreign online retailers to avoid higher expenses of the budget on tax control and gray import channels, business daily Kommersant reported Tuesday.

Alexander Ivanov, president of NAMO, which unites 17 international companies, including eBay, Pony Express, PickPoint, Hermes and Boxberry, sent a letter earlier in November to Deputy Prime Minister Arkady Dvorkovich. Ivanov explained negative consequences of the introduction of the VAT for foreign online stores.

Dvorkovich’s spokeswoman Aliya Samigullina said the document has not been received yet.

President Vladimir Putin ordered the government in November to study a possible VAT and customs duties for foreign online retailers. Should it be the case, the Russian market will stop being interesting for most of foreign e-stores, NAMO said.

The imposition of the VAT will result in further plummeting of Russia’s share in the global e-commerce. The country currently accounts for U.S. $13 billion out of $1.67 trillion in total.

“The same thing happened in Brazil, which was abandoned by world players, like Alibaba and eBay,” NAMO said.

The association offers instead to add the sales tax with a low barrier of 8% like in Japan, or 10% like in Australia.

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