An aim to shield domestic online retailers from the growing competition of foreign e-commerce giants, the Turkish government has announced significant changes to its customs regulations. A presidential decree published in the Official Gazette on Tuesday revealed that import duties on goods valued at less than €30 ($33) have been substantially increased, while the duty-free threshold has been slashed from €150 to just €30.
The new measures, set to take effect on August 21, 2024, are expected to have a profound impact on Turkish consumers who frequently shop from popular international online platforms like Temu and AliExpress. The import duty on packages from European Union countries will rise to 30%, up from the current 18%. Even more drastically, the duty on goods arriving from outside the EU will double from 30% to a staggering 60%.
Moreover, products falling under certain categories specified in the Special Consumption Tax Law, such as luxury items, will be subject to an additional fixed tax of 20%. This extra levy comes on top of the already increased customs duties, further driving up the cost of international online purchases for Turkish shoppers.
Temu, a Chinese e-commerce app that has rapidly gained popularity in Turkey. The government's decision to implement these stringent tax measures is seen as a direct response to the growing concerns over the impact of cross-border e-commerce on local businesses and the economy.
The repercussions of Turkey's new customs regulations have already begun to manifest, with global sportswear giant Nike announcing the suspension of all online orders from the country. Citing the recent changes in customs rules, Nike stated that it is currently unable to ensure timely and efficient delivery of customer orders.
Turkey's move to tighten customs regulations and increase duties is a significant blow to the growing trend of cross-border e-commerce. The reduced duty-free and higher taxes are likely to discourage Turkish consumers from making purchases on international online platforms, potentially driving them back to local e-commerce sites and brick-and-mortar stores.
The World Trade Organization (WTO) moratorium on customs duties for electronic transmissions, worth an estimated $1.3 billion, was recently extended until March 2026. However, if countries like Turkey decide not to renew the moratorium and instead impose tariffs on e-commerce alongside consumption and digital taxation measures, it could pose a severe risk to the digital economy and broader economic growth.
For international online retailers and marketplaces, Turkey's new customs regulations present a complex set of challenges. Sellers will need to adapt to the increased duties and taxes, which may require adjustments to their pricing strategies and supply chain operations.
To navigate these challenges, international e-commerce companies may need to explore alternative strategies, such as establishing local warehouses or partnering with domestic fulfillment providers. By bringing their inventory closer to Turkish consumers, sellers could potentially avoid some of the increased customs duties and streamline the delivery process.
As Turkey implements these protectionist measures, the future of e-commerce in the country remains uncertain. While the government aims to bolster local businesses and reduce the outflow of foreign currency, critics argue that such policies may ultimately harm consumers by limiting their access to a wider range of products and competitive prices.
The long-term impact of these regulations will depend on various factors, including the response of international e-commerce players, the adaptability of local businesses, and the shifting preferences of Turkish consumers. As the global e-commerce landscape continues to evolve, Turkey's approach to cross-border trade will undoubtedly shape the country's digital economy in the years to come.
