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Cyprus’ New Online Shopping Duty Generates Nearly €2 Million In Its First Month

Cyprus collected nearly €2 million in July after introducing a new €3 customs duty on low-value online purchases, highlighting the continued volume of cross-border e-commerce entering the country.

According to Customs Department spokesperson George Constantinou, authorities processed around 160,000 parcels containing approximately 650,000 chargeable items during the first month of the measure. Based on those figures, the new duty generated an estimated €1.95 million in revenue.

Stronger-Than-Expected Start

The result exceeded initial expectations. Authorities had previously projected the measure would raise around €15 million annually, meaning July alone accounted for roughly 13% of that estimate. However, customs officials said it is still too early to conclude, noting that some shoppers may have placed orders in June before the duty took effect, while seasonal holiday spending may also have influenced July’s figures.

How The Charge Works

Introduced across the European Union on 1 July, the duty applies to consignments valued below €150 arriving directly from countries outside the bloc. Rather than charging each parcel once, the €3 fee applies to every customs category included in a shipment, meaning a parcel containing products from three categories would incur a €9 charge.

Looking Ahead

Customs officials said the rollout was completed without major operational issues, with only minor adjustments required during the first days of implementation. They also expect shoppers to adapt to the new system over time, while retailers may increasingly shift inventory to EU-based warehouses to avoid the charge on goods shipped directly from third countries.

The measure forms part of a broader European response to the rapid growth of low-value imports from platforms such as Temu, Shein and AliExpress. In 2025, EU customs authorities processed nearly 5.9 billion low-value items, representing almost 98% of all imported goods handled across the bloc.

Bank Of England Holds Rates At 3.75% In Split Vote As Inflation Risks Rise

The Bank of England kept its benchmark interest rate at 3.75% on Thursday, but the decision was not unanimous. In a 6-3 vote, the Monetary Policy Committee kept rates unchanged, while three members backed a 25-basis-point increase to 4%. Renewed energy price pressures have added to concerns that inflation could remain elevated.

Inflation Pressures Remain

Policymakers said inflation “is likely to rise further over coming quarters,” citing higher and more volatile crude oil and refined energy prices since the conflict began.

So far, there has been “little evidence” of significant second-round effects, such as broader wage and price increases. Inflation risks, however, are now “tilted to the upside” and have increased since the July Monetary Policy Report.

Energy Prices Add To Inflation Risks

Brent crude has risen 36% since July, reaching $106 a barrel on Sept. 14, while UK wholesale gas prices increased 78% to 207 pence per therm.

Higher energy costs can feed into transport, production and household expenses, raising costs across supply chains. Refinery pressures have also pushed crack spreads, the difference between refined fuel and crude prices, well above pre-conflict levels.

Economy Shows Resilience

Despite the inflation risks, UK economic activity has held up slightly better than the Bank expected. A softer labor market and higher borrowing costs are expected to help reduce inflation over time.

Previous monetary tightening is still working through the economy, according to policymakers. So far, the latest energy shock has not produced clear evidence of a broader wage-price spiral.

Major Central Banks Take Different Paths

The decision comes during a busy period for global monetary policy. The Federal Reserve raised rates Wednesday to 3.75%-4% in its first increase since 2023, while the European Central Bank recently lifted its deposit rate to 2.5%.

The Bank of Japan is due to announce its decision Friday, with markets expecting a rate increase. Thursday’s split vote shows that pressure for tighter policy remains within the Bank of England’s Monetary Policy Committee.

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