JAKARTA, Indonesia, Feb. 21, 2024 /PRNewswire/ — Leading up to the World Trade Organization (WTO)’s 13th Ministerial Conference (MC13) , the coalition for the Digital Prosperity for Asia (DPA) sent a letter to Indonesia’s Ministry of Finance, Ministry of Trade, and Ministry of Foreign Affairs to support the continuation of the WTO Moratorium on Customs Duties on Electronic Transmissions (WTO Moratorium on E-commerce). Representing digital small-medium businesses across APAC, the DPA submitted the letter on behalf of its members and industry representative groups who would be impacted should the Moratorium lapse.
The WTO Moratorium on E-commerce maintains that customs duties should not be imposed on electronic transmissions. WTO members have periodically agreed upon this Moratorium since 1998. It will be considered for renewal at the upcoming WTO MC13 between 26-29 February.
The DPA’s letter advocates for an enabling regulatory ecosystem that ensures accessibility to digital services for more than twenty million small-medium businesses in Indonesia, particularly those looking to leverage new technologies in areas such as digital payments, content creation, online gaming and artificial intelligence. Given the prevalence of digital transmissions, the lapse of the Moratorium impact Indonesian industries across all sectors.
Indonesia’s digital economy is the engine for its future national growth, currently ranking first among other ASEAN countries. With the ASEAN Digital Economy Framework Agreement, Indonesia is projected to achieve an unprecedented US$400 billion value from its digital economy alone. Digitalization is at the core of this growth and plays a pivotal role in supporting Indonesia’s forward-looking approach to achieve prosperity.
Enabled by the Moratorium, Indonesians can access technologies that put them on the global radar. Many indispensable homegrown businesses require ongoing support from imported technologies in its operations, such as the petroleum and coal industries—which are top exporters—that rely on cloud technologies for operational efficiency and security. Indonesia’s online service platforms, including two decacorns and a handful of unicorn tech startups, are also reliant on seamless cross-border data flows to grow and export their products and services abroad. Other sectors can also be impacted, including agriculture, renewable energy, and the entertainment industries.
According to a 2019 OECD study, barriers to digital trade through custom restrictions on digital products and data flows can potentially cause economic losses wider than the revenue gained through customs duties. By imposing tariffs, Indonesia would give up 160 times as much GDP as it would collect, while the tax revenue losses are estimated to be 23 times larger than the tariff revenues for Indonesia.
Through this letter, the DPA urges the Indonesian government to revisit the role of cross-border access to digital tools in supporting Indonesia’s digital small-medium businesses and bolstering the national economy.
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About DPA
The DPA is a coalition of Asian digital companies promoting the democratization of digital technologies across all sectors. For more information, visit digitalprosperity.asia.
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