End of digital trade moratorium must irk tech bros

THE last meeting of the World Trade Organization (WTO) was decidedly low-key. Nonetheless, it was consequential. Brazil and Turkey blocked a US-led attempt to extend WTO’s moratorium on customs duties on electronic commerce, including on digital downloads and streaming.

For the first time since the early days of the Internet, members now have the right, under WTO rules, to tax digital transmissions, including software updates as well as video and music streaming services such as Netflix and Spotify.

In the run-up to WTO’s 14th Ministerial Conference (MC14) in Cameroon’s capital Yaounde, advocates for a tax-free Internet commerce argued that this moratorium, in place since 1998, had enabled digital trade to flourish. If each country now decided on its own tax rates for e-commerce, the result would be complexity and higher costs for both sellers and buyers, it was argued. For instance, any company wanting to update its software for, say, its invoicing system would now potentially be liable to pay a tax. It will add to business costs.