The European Commission is proposing to end a customs duty exemption on low-value goods as part of “the most ambitious and comprehensive reform of the EU Customs Union”. 

As it stands, most goods valued at below €150 are not required to pay customs dues when they enter the EU.

But the commission argues that this exemption is heavily exploited by buyers who undervalue their items to avoid paying customs.

“Up to 65 per cent of such parcels entering the EU are currently undervalued, to avoid customs duties on import,” the commission said in a recent statement.

It wants to end the customs duty exemption by 2028 as part of wider reform plans that include a singular data centre for the entire European Union, a system that allows a faster customs procedure for trusted traders and a new EU Customs Authority.

The commission proposal is still in its initial stages and will need to go through a process involving the EU’s two legislative bodies, the Council and the European Parliament (EP) before becoming law. 

Maltese MEP Alex Agius Saliba said that the proposal to stop the customs exemption comes at “a bad time”. 

“It is not the right moment and it is not the right time to impose new taxes when prices on everyday goods are increasing,” the MEP who sits on the European Parliament’s internal market committee said. 

“An increase in prices is the biggest issue we face at the moment,” he said. 

Agius Saliba said that Maltese citizens, who are more likely to purchase items from the internet than other EU citizens, would especially feel the hit.

But greater harmonisation and cooperation between EU member states is a good thing, Agius Saliba said. 

What would you have to pay?

Should the proposal, in its current format, pass through the EU’s legislative bodies most goods no matter their price will face customs duties.

Four separate duty rates will apply to different types of goods.

Toys, games and houseware articles would be taxed at five per cent, silk products, carpets and glassware would be at eight per cent, electric machinery at 12 per cent and shoes at 17 per cent.

Items that have no customs duties like books and medicines will remain at zero per cent.

The 27 members of the EU form part of the single market, meaning that importers and exporters pay no dues when moving their products from one member state to another. 

EU members states also abide by the same customs regulations meaning that those wanting to import goods from outside the EU have to pay the same dues and abide by the same rules when importing their products into the European Union.

It is not the right time to impose new taxes when prices on everyday goods are increasing- Maltese MEP Alex Agius Saliba

The commission’s reform seeks to harmonise practices and increase cooperation between member states in their customs work. 

An EU Customs Data Hub would compile data provided by businesses and provide authorities across the EU with more complete information on supply chains, the movement of goods and specific importers.

Trusted importers would be able to go through a fast-tracked process through a system of ‘Trust and Check’ traders.

A new EU Customs Authority would oversee customs operations and analyse customs data. 

The Maltese government described the proposal as “an ambitious reform that is intended to address the pressures on the customs throughout the customs union”.

“While Malta sees this streamlining and simplifying of the customs union code as a positive way forward to facilitate trade, the final package of this reform is still subject to discussion among technical experts from all EU member states,” the finance ministry said.