Cross-border Retail E-Commerce and De Minimis: The Case of Kazakhstan

Abstract

The development of international e-commerce has expanded opportunities for business and consumption in Kazakhstan and worldwide. However, these rapid changes have challenged the governments’ regulation of the flow of cross-border goods, ranging from clearance to customs duty and taxes collection. Among concerns is the flow of low-value consignments, the impact of which had previously been seen as beneficial. This paper examines whether cross-border e-commerce and the de minimis threshold are advantageous in Kazakhstan based on context, description, cause-and-effect and statistical analysis. The findings show a partial impact of de minimis threshold changes on the increase in retail e-commerce goods imported and on the decrease in the value of mis-declared goods; however, in Kazakhstan the consequences from the import of mis-declared low-value goods on the tax revenue are insignificant. Misuse of the de minimis threshold in Kazakhstan is confirmed by the study. Government actions for solving this problem involve giving higher priority to people’s access to higher quality and/or cheaper personal use goods. Also, the potential for further improvement of statistics on cross-border e-commerce is identified.