Mandatory tagging of bicycles in Russia may oblige some importers to pay higher import duties, according to sources, normalizing the market in similar ways as the mandatory tagging program recently introduced for footwear.
In Russia, bicycles are subject to a 10 percent import duty, but some importers of Chinese products are consciously undervaluing the price when filling in their customs declaration forms, according to Alexander Nachevkiv, general director of Russia’s biggest bike producer, Velomotors. He told the Russian press that importers may declare an import price of around 5,000 rubles (€56.3-$66.5) per bicycle, although the actual market price is 20 to 40 times higher.
It is extremely difficult for Russian companies to compete with Chinese suppliers in these circumstances, Nachevkiv said, adding that “the country’s borders are almost completely open.”
Things may change with the mandatory tagging of bicycles, which the Russian Industry and Trade Ministry plans to introduce sometime in 2021. With the new system, the government would be able to monitor the prices at which imported bicycles are sold in the market and compare them with the prices recorded in their customs declaration forms.
The size of the Russian bicycle market is currently estimated to be close to five million units per year, with imports accounting for 60 percent of this figure. Almost all of the country’s imported bicycles come from China.
Meanwhile, the mandatory tagging of shoes introduced in Russia on July 1 has helped the government determine the real volume of sales in the country, said Denis Manturov, the Russian Industry and Trade Minister, during a meeting with Russian President Vladimir Putin early in September.
The tagging project showed that up to 1.3 billion pairs of shoes are sold in the country on average each year. This is nearly three times more than the previous official estimates, Manturov said. The tagging program pushed all market participants to legalize their business, Manturov said, while allowing the government to charge higher taxes. Many of the shoes previously sold illegally were sport-inspired sneakers, including fakes.