Chinese junk will be expensive for society – we will lose tax revenue and jobs

The volume of low-price goods flowing from outside the EU to Finland via online stores has increased explosively. In 2024, more than 28 million e-commerce shipments arrived in Finland, 98 per cent of which came from China. The Finnish Commerce Federation’s calculations show that the tax handprint of domestic specialty goods trade in Finland is much larger than that of Chinese e-commerce.

According to Customs’ statistics, Finland received only EUR 29.4 million in tax revenue from online purchases worth less than EUR 150 made from outside the EU in 2024. If these purchases had been made from domestic stores, the tax revenue would have been as much as EUR 324.2 million, which is 11 times higher than the current revenue. If only 30 per cent of the online purchases had been replaced by purchases made in Finland, the tax revenue remaining in Finland would have been EUR 97.2 million, which is more than three times higher than the tax revenue received by Finland.

“Tax losses arise when consumers bypass the costs of domestic labour and business by buying products from Chinese online stores that do not pay labour taxes or companies’ corporate taxes to Finland,” says Jaana Kurjenoja, Chief Economist of the Finnish Commerce Federation.

In addition to the loss of tax revenue, distance selling outside the EU reduces domestic employment.

“The problems caused by distance selling outside the EU affect the entire society. The wave of low-price goods and counterfeit products threatens employment, the circular economy and consumer protection, and reduces the number of commerce sector companies and headquarters in Finland,” says Kari Luoto, Managing Director of the Finnish Commerce Federation.

In addition, many products do not meet the EU’s product safety standards, as shown by the test purchases made by the Finnish Commerce Federation and the product safety tests made by several European consumer organisations.

More focus on monitoring distance commerce, consumer purchasing power and the competitiveness of domestic commerce

The Finnish Commerce Federation finds solutions to the problems caused by distance selling both in the EU and in Finland.

“Online marketplaces must be assigned more responsibility for the products and services sold and the Commission should have broader jurisdiction in the market surveillance of e-commerce outside the EU. Platforms should also be brought more closely under producer responsibility. In addition, the removal of the EUR 150 duty-free limit for goods purchased from outside the EU must be urgent,” says Luoto.

In Finland, the taxation of labour should be reduced in the long term at all income levels, as this would strengthen consumers’ purchasing power and support the competitiveness of commerce that operates and employs in Finland. In addition, the resources of supervisory authorities should be allocated to the monitoring of distance selling.

“In order for the domestic specialty goods trade, in particular, to be able to respond as well as possible to the tightening international competition, there must be investments in the application of innovations, brand building and the utilisation of data. That is why more investments are needed in innovation funding,” says Luoto.

Attachment: The problems of distance selling outside the EU and the solutions proposed by the Finnish Commerce Federation (pdf)

For further information, please contact:

Kari Luoto, Managing Director, Finnish Commerce Federation, tel. +358 (0) 400 688 708, kari.luoto@kauppa.fi

Jaana Kurjenoja, Chief Economist, Finnish Commerce Federation, tel. +358 (0)40 820 5378, jaana.kurjenoja@kauppa.fi