Cyprus collects nearly €2 million from new low-value parcel duty in July

Nicosia, Cyprus. Cyprus collected approximately €1.95 million in July from a new €3 customs duty on low-value consignments arriving directly from countries outside the European Union, Customs Department spokesman George Constantinou said.

The department processed 650,000 chargeable items contained in 160,000 parcels during the measure’s first month, according to Constantinou.

Revenue and scope

The duty entered into force on July 1 and applies to consignments valued at less than €150 arriving directly from non-EU countries.

The charge is applied by product category rather than once per parcel. A parcel containing products from three different customs categories, for example, is charged €9.

Based on July’s figures, the average customs charge was just over €12 per parcel. The month’s revenue represented about 13 per cent of the department’s earlier annual estimate of approximately €15 million.

If collections continued at the July level, annual revenue would exceed €23 million. Customs, however, said the first month could not be considered a reliable indicator of longer-term shopping patterns.

Imports and consumer behaviour

Constantinou said Cyprus recorded a relative decline in small-parcel imports compared with previous months, although it was too early to determine whether consumers had been discouraged by the additional cost.

He said some shoppers may have brought orders forward to June to avoid the charge, while online purchases may also decline naturally during July because it is a holiday month.

The department expects a clearer picture to emerge within the next three to four months.

Retailers and processing

The response of major online retailers will also be monitored, Constantinou said. Some companies may choose to keep stock in warehouses within the EU and dispatch orders from there, avoiding the treatment applied to goods shipped directly from third countries.

Despite the volume of goods processed, Constantinou said there were no particular problems in handling the additional administrative workload.

He said adjustments were needed during the first days until calculations and collection procedures were processed through the accounting system, but that operations had since normalised.

The department has not received formal complaints from shoppers. Initial queries focused mainly on whether the charge was determined by the date an order was placed or the date a parcel entered the EU.