The threat of Chinese goods flooding into Thailand is escalating

Recently, the private sector in Thailand expressed concerns to the government. They are worried about the large influx of Chinese goods into the Thai market. They stated that these imports have significantly impacted 23 industry groups. The impact has been especially severe on small and medium-sized enterprises (SMEs).

According to a report by the Joint Standing Committee of the Industrial and Commercial Bank of Thailand, the total value of goods imported by Thailand from China has soared to $375.7 billion since the first half of 2024. This represents a 7.12% increase compared to the same period last year. The surge has worsened Thailand’s trade deficit with China, which has reached a new high of $199.7 billion. This marks a year-on-year growth of 15.66%. The situation has deeply concerned the Thai private sector, especially regarding its impact on the 23 industry clusters.

Thai customs are intensifying the inspection of imported goods from China.

According to Deputy Minister of Finance Chulaporn, the value-added tax collection measures have been helpful in improving the competitive environment. However, more efforts are needed to address the issue of the large influx of Chinese goods. Therefore, the customs department has stepped up inspections of non-conforming products and those lacking the necessary import licenses.

To meet the challenges, the Thai government has taken decisive actions. It introduced a series of policy measures aimed at creating a fairer competitive environment for local Thai enterprises. One major initiative was to levy value-added tax (VAT) on cross-border transactions. This applies to the import of small-value goods not exceeding 1,500 Thai baht. The goal is to alleviate the disadvantaged position of Thai merchants in price wars.

Meanwhile, the government has strengthened its control over non-conforming imported products. It has instructed the customs department to conduct strict inspections on goods in violation of regulations to prevent inferior or products that do not meet safety standards from flowing into the market. This not only protects the rights and interests of consumers but also sets up a quality safeguard for local manufacturers. On the other hand, the government has also required e-commerce platforms to sign agreements with the Ministry of Finance to ensure the effective collection of VAT, plug tax loopholes, and prevent online sales channels from becoming hotbeds for tax evasion.

To further optimize the import process and improve administrative efficiency, the customs department has announced new reform measures. Starting from November 1st, the maximum number of items covered by each customs declaration form will be significantly reduced from the original 250 pieces to only 40 pieces.

Formal customs clearance in Thailand

As the end of 2024 approaches, many Southeast Asian countries are intensifying their efforts to crack down on illegally imported goods. Countries such as Thailand, Vietnam and Indonesia have successively introduced new measures to curb the inflow of products that have not gone through formal customs clearance procedures into the market.

In Thailand, the formal customs clearance process (customs clearance) usually involves getting imported goods through customs and obtaining approval for their legal entry into the Thai market. This process requires following a series of regulations and procedures to ensure compliance with the requirements of Thai customs. The following is the formal customs clearance process:

1.Prepare Documents

Importers are required to provide a series of documents, which usually include:
Commercial Invoice, Packing List (Shipping List), Bill of Lading, Certificate of Origin, Import License, Customs Declaration Form.

2.Import Declaration

The importer or their agent (such as a customs clearance agent) needs to submit the declaration form to the Thai customs. The declaration form should be filled out truthfully with detailed information about the goods and accompanied by all relevant documents.

3.Pay Customs Duties and Value-Added Tax (VAT)

Thailand levies customs duties and value-added tax (VAT) on imported goods. The calculation of customs duties and VAT is based on the customs value of the goods (CIF price), that is, the cost, insurance, and freight of the goods.

4.Customs Inspection and Release

The customs will review the customs declaration documents as well as the goods to check if they meet the import requirements. If all the documents and information are correct and there are no issues, the customs will approve the release of the goods. If the customs discovers problems, fines or other penalties may be imposed.

5.Transportation after Customs Clearance

Once the goods have completed customs clearance, the importer can arrange to pick up the goods and transport them to the destination. If the goods arrive in Thailand by sea, usually the bill of lading is required to pick up the goods. If it is by air, the goods can be picked up through a freight forwarder.

6.Goods Delivery

The goods that have gone through customs clearance can be transferred to the importer or other designated consignees. The importer needs to confirm the receipt of the goods and handle the terms according to the contract.

Ensuring accurate and error-free customs declaration materials and the timely collection of taxes and fees are the keys to smooth customs clearance. Under the supervision of Thai customs, compliance with relevant laws and regulations can effectively avoid unnecessary supplements and expenses.