17:27 JST, May 15, 2025

The Finance Ministry is considering imposing the consumption tax on low-cost imported goods priced at ¥10,000 or less that are currently exempted under the de minimis rule, according to sources.

The ministry is set to revise the rule, which also exempts such goods from tariffs.

Behind the move is the situation in which Chinese e-commerce sites are boosting their sales of low-cost items under the rule. The ministry aims to level the playing field for competition between domestic and foreign businesses.

Other countries are also making changes to their de minimis rules. The administration of U.S. President Donald Trump suspended the de minimis rule for items imported from China.

Regarding the timing of making the change, the ministry is eyeing the government’s tax reform scheduled for next year or later. The ministry is considering making it mandatory for businesses managing e-commerce sites to register with the tax authority and file their tax.

The ministry is set to continue tariff exemptions, because the imposition of tariffs creates additional on-site workloads.

“De minimis” means “about minimal things” in Latin. Similar systems have been introduced in many countries to reduce the burden of customs clearance work.

Japan currently exempts imported items priced at ¥10,000 or less from a tariff and the consumption tax. According to the ministry, there were 169.66 million cases — worth ¥425.8 billion — of imports of low-cost goods priced at ¥10,000 or less in 2024, five times larger than five years ago.

Experts point out that Temu, Shein and other Chinese e-commerce sites have been increasing sales of low-cost items in recent years, taking advantage of the de minimis rule of various countries. According to research firm Sensor Tower, Temu’s e-commerce application was the most downloaded app worldwide last year, with 550 million downloads, followed by Shein.

According to the ministry, many domestic businesses are apprehensive about the situation regarding Chinese sites.

“Their price competitiveness is strong, and they pose a threat to us. It’s possible that they could take more market share,” a domestic business said.

“The imbalance of competitiveness has too much of an impact,” another said.

An increasing number of countries are abolishing or diminishing the rule. The U.S. government suspended tax exemption for Chinese goods from May 2 to eliminate a loophole in its tax system. Vietnam abolished the system in February, and the EU is also trying to revise its rule.