WTO extends nil tariffs on digital trade for 6 months
The World Trade Organisation (WTO) yesterday decided to
extend the 20-year-old practice of not imposing customs duty
on digital trade by six months to June 2020—seen as a
setback for India and other developing nations. South Africa
and India had argued that the moratorium led to loss of
revenue as it gave such transactions immunity from taxation
in the WTO.
The moratorium ondigital
worth an estimated $225 billion a year, has been in place
since 1998, but was due to expire this month. The moratorium
was last extended at the 2017 Ministerial Conference in
Buenos Aires until the next ministerial, originally planned
for December 2019.
India’s potential annual loss of revenue by not taxing
electronic transmissions is around $500 million, according
to a study by theUnited
Nations Conference on Trade and Development(UNCTAD).
Of the total $8 billion of potential tax losses projected
for 58 developing countries, Mexico, Thailand, Nigeria,
India, China and Pakistan face the highest losses, the
research paper said.
Amid fears that countries would indiscriminately impose
the United States have demanded that the temporary
moratorium be made permanent, according to global news