WTO’s Issues of Imposing Tariff Revenues on Digitizable Products

A number of products that have been traded physically in the past have now been converted into a digitized format and are imported through the Internet. This process has raised the question of whether these products should be subject to customs duties, as are their physical counterparts. Due to the World Trade Organization (WTO) moratorium on customs duties for electronic transmissions, some countries have raised concerns about possible revenue loss if the imports of electronic goods remain tariff-exempted. Apart from the applied tariffs, there are a number of additional duties and taxes levied on most imports by most countries, which can also be lost if imports of physical goods are replaced by electronic delivery and exempted from customs duties.

The following questions have been addressed in this article:

What are the customs issues related to the electronic transmission of data which have physical counterparts?
In addition to tariff duties, what additional duties would be lost if imports of physical goods are replaced by electronic delivery?

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