Potential Tariff And Tax Revenues Losses From Import Of Digitized Goods

The 2001 Report of E-Commerce and Development of United Nations Conference on Trade and Development (“UNCTAD”) conducted calculations on tariff and tax revenues that are currently being collected from the import of digitized goods. Further, the Report stated that such revenue could be potentially lost due to proposed ban of “tariff–free environment for e-commerce”. However, such calculations, which were done based on two types of customs duties, showed that while developed countries would mainly be affected by forgone consumption tax on the import of digitized products, the countries that will be mostly affected by tariff and tax revenue losses would be the developing world.

The following questions have been addressed in this article:

What countries would be mostly affected by this fiscal loss?
Are there any other duties that are being collected on their imports which potentially will be lost too?
What is the most controversial issue with custom duties with regard to digitized products?
What are the multilateral rules?

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