China is implementing a new policy on cross-border e-commerce, in a bid to ensure fair competition with traditional retailers.
The new policy limits single tax-free cross-border purchase to 2,000 yuan. Any goods that exceed this range will be levied. And the maximum of purchases per person a year is set at 20,000 yuan.
The upper limit for tax-free products bought overseas will be reduced from 5,000 to 2,000 yuan for each citizen who's returning to China.
Tax on luxury goods will be increased to 60 percent. Imported goods priced under 500 yuan will be most affected as they hadn't been taxed before.
Tax on personal mail packages will also be increased.
Officials say the new policy will curb tax losses in this area. Data shows that although cross border e-commerce transactions were more than four trillion yuan in 2014, the tax collected on personal mail packages was less than one billion yuan, which highlights the big loss in tax revenue.