Russian license plate on the cars occupying parking-slots outside food-stores and shopping malls in Kirkenes are a good indicator of the increasing cross-border shopping. Especially on Saturdays, Russian speaking customers are nearby as many as Norwegians in the shops in the small Norwegian town, located less than a half hour drive from the border.
Russians buy products tax-free in Norway. To get the VAT exemption back they need to present the tax-free formula and the actual items to the customs upon departure at the Storskog border station. The payback money will then be transferred to the shoppers’ accounts.
- We don’t have an exact overview of the total value of products Russians bring over the border, says Atle Joakimsen, head of Customs in northern Norway to BarentsObserver. Joakimsen however assumes the value of the products bought tax-free to be up to NOK 70 million last year.
- If the average amount of per traveler is NOK 1,000 (€130) and there were 64.000 formula delivered at the Customs in 2010, that makes NOK 64 million (€8,35 million) as a rough estimate, says Atle Joakimsen. Products with a value of less than NOK 250 are not registreded. In addition comes all trade and services that are not reckoned as tax-free shopping.
Since the end of 2010, the number of border-crossings between Norway and Russia in the north have peaked another 40 percent, mainly due to increased shopping visitors to Kirkenes. It can therefore be assumed that the total value of tax-free shopping for 2011 in Kirkenes will be at least NOK 100 million (€13 million).
Shopkeepers on the Russian side of the border do not fear losing money following the increase border traffic to Norway.
Welcomes more open border - I don’t think we will lose customers, says Ludmila Podchevarova. BarentsObserver meets Ludmila at her small clothing store at the market in Nikel, the nearest town to the Norwegian border.
- More open border is only positive for us, she says while showing some of the clothes in her shop that are bought in Kirkenes and that Ludmila will make some profit by selling to local customers.
- Jackets and boots are popular here, while other styles and qualities are what people buy in Norway, Ludmila Podchevarova explains.
Norway cheaper The outdoor fruit- and vegetable market in Nikel might have bigger competition from the increasing border trade. Apples and oranges have near double price in Nikel compared with food-stores in Kirkenes.
While the stores in Kirkenes are crowded with Russian customers, there is one business that attracts Norwegians to Nikel; the newly opened Rosneft gasoline station in the entrance to the town.
One-third of the price The gasoline price in Russia is one-third of Norwegian prices. No wonder why Norwegian license plates on the cars beside the petrol pumps are a common sight in Nikel.