Smuggling of electronics

26/ 04/ 2017

The government has recently passed a law which requires all the consumer electronics to be sold using cash registers. This Government Resolution is seen as a key tool to make progress in combatting “grey” and “black” import. However, some challengers of this idea have expressed their concerns regarding the potential shutdown of online shops as well as the increase in prices on electronics. The validity of both of these statements is questionable as firstly, the businesses who operate within their legal borders will have cash registers anyway which means their price won’t be increased. Secondly, it is important to understand, that the unit cost directly depends on the volume of the market. Naturally, in the neighbouring to Ukraine countries the sales volumes of electronics are greater than the Ukrainian one and they exceed the consumer’s potential of their own markets. This was and still is the case because the non-compulsory use of cash registers allows for the smugglers to buy electronics abroad and sell it unofficially in Ukraine. The introduction of compulsory cash registers will gradually promote the reduction of illegal electronics’ import to Ukraine. As the official market will become larger, the unit price will decrease. All in all, compulsory use of cash registers will develop the official market and reduce the risk of corruption. In addition to the above-mentioned advantages of compulsory use of cash registers, it will also lead to better protection of consumer rights, through more secure warranty and post-warranty services as the consumers will be able to obtain a receipt when they buy the desired type of electronics. The goods that were brought into Ukraine illegally may have different and perhaps lower safety standards which also puts the consumers at risk. One may now conclude that the development of an official economy of the country instead of a shadow economy will benefit the consumers more than they may initially think. Read the full article on Ekonomichna Pravda

Secondly, it is important to understand, that the unit cost directly depends on the volume of the market. Naturally, in the neighbouring to Ukraine countries the sales volumes of electronics are greater than the Ukrainian one and they exceed the consumer’s potential of their own markets. This was and still is the case because the non-compulsory use of cash registers allows for the smugglers to buy electronics abroad and sell it unofficially in Ukraine. The introduction of compulsory cash registers will gradually promote the reduction of illegal electronics’ import to Ukraine. As the official market will become larger, the unit price will decrease. All in all, compulsory use of cash registers will develop the official market and reduce the risk of corruption.

In addition to the above-mentioned advantages of compulsory use of cash registers, it will also lead to better protection of consumer rights, through more secure warranty and post-warranty services as the consumers will be able to obtain a receipt when they buy the desired type of electronics. The goods that were brought into Ukraine illegally may have different and perhaps lower safety standards which also puts the consumers at risk.

One may now conclude that the development of an official economy of the country instead of a shadow economy will benefit the consumers more than they may initially think.

Read the full article on Ekonomichna Pravda