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WTO Committee on Trade and Development Seminar on Revenue Implications of E-Commerce Geneva, 22 April 2002. Revenue Implications of E-Commerce: The Development Dimension Dr. Susanne Teltscher United Nations Conference on Trade and Development www.unctad.org/ecommerce - PowerPoint PPT Presentation
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WTO Committee on Trade and DevelopmentSeminar on Revenue Implications of E-CommerceGeneva, 22 April 2002
Revenue Implications of E-Commerce:
The Development Dimension
Dr. Susanne Teltscher
United Nations Conference on Trade and Development
www.unctad.org/ecommerce
Presentation Outline
Government revenue sources Customs moratorium Trade in digitized products Tariff revenues from digitized
products Other revenue implications Conclusions
Government revenue shares
020406080
100
All Countries DevelopedCountries
DevelopingCountries
%
Tax revenue as % of total revenue
Import duties as % of total revenue
Goods/Services taxes as % of tax revenue
Import duties as % of tax revenue
Customs moratorium on electronic transmissions
What are electronic transmissions? Customs duties: usually on goods Problem: goods sent digitally Potential customs revenue losses
on digitized products
Digitized products - definition
Can be delivered physically or digitally Can be identified by HS code Can be transformed into digital format Physical delivery: via carrier medium Digital delivery: via networks Books, software, music, film, video
games
Customs revenues from digitized products
need to look at:
trade flows applied MFN tariff rates other customs duties (import
taxes) revenues
World Trade in DP, 1999
World Developed c. Developing c.
Total imports, US$ bill. 48.2 40.5 7.7
Total exports, US$ bill. 46.4 41.0 7.7
DP imports, % share 0.9 1.0 0.4
DP exports, % share 0.9 1.1 0.4
% share world DP imports 100 81.5 18.5
% share world DP exports 100 88.5 11.5
Annual growth rates of DP imports
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
1991 1992 1993 1994 1995 1996 1997 1998 1999
Developing countries Developed countries
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
1991 1992 1993 1994 1995 1996 1997 1998 1999
Developing countries Developed countries
Annual growth rates of DPexports
DP exports by commodity group
02468
101214161820
Print Software Sound Videogames
Film
US
$ b
illio
n
Developed Countries Developing Countries
DP imports by commodity group
02468
101214161820
Print Software Videogames
Sound Film
US
$ b
illio
n
Developed Countries Developing Countries
Applied MFN rates on DP imports, 1999
02468
1012141618
World DevelopingCountries
DevelopedCountries
%
average MFN import-weighted MFN
Applied MFN rates on DP imports per commodity group
0
5
10
15
20
25
Film Print Software Sound &media
Videogames
%
Developed countries Developing countries
DP Tariff Revenues, 1999
0.00.10.20.30.40.50.60.70.80.91.0
US
$ b
illi
on
World Developedcountries
Developingcountries
DP Imports and Tariff Revenues, 1999
0
10
20
30
40
50
60
70
80
90
Developed Countries Developing Countries
%
% share of world DP imports % share of world DP tariff revenues
What other duties are levied on DP imports?
Customs surcharges fees, uplifts, statistical taxes, port taxes add 7 %
Internal taxes VAT, sales taxes, consumption taxes add 15 %
DP Import Revenues, 1999
0 1 2 3 4 5 6 7 8
Tariff
Tariff and cust.surcharges
Consumption tax
All import duties
US$ billion
Developed countries Developing countries
Shares of DP Import Revenues in Total Gov.Revenue (%)
Tariff/ Tariff/ All duties/ import rev. total rev. total rev.
World 1.7 0.16 0.5
Developed C. 2.7 0.04 0.4
Developing C. 1.4 0.16 0.6
Evidence of substitution
Potential vs. actual impact: Is digital delivery already replacing physical delivery?
Examples and trends (Forrester): digital CD sales will overtake physical sales by
2004 publishing industry: 17.5% of revenues will result
from digital delivery by 2005 22% of online sales of DP will be delivered digitally
in 2004 (software 40%, music 25%, video games 14%, books 14%, film 1.5%)
Conclusions - Challenges
Potential tariff revenue losses are higher in developing countries (but are small in relative terms)
Potential tax revenue losses (VAT) are significant in developed countries
Developing countries will be net e-commerce importers (in the short-medium run)
Enforcement of tax and tariff payments related to digital delivery
Conclusions - Opportunities
Cheaper imports will benefit consumers and businesses
E-commerce will spur cross-border trade (highest growth rates in developing countries)
Developing countries are diversifying into exports of ICT-related products and services and gaining market share
WTO Committee on Trade and DevelopmentSeminar on Revenue Implications of E-CommerceGeneva, 22 April 2002
Thank you
www.unctad.org/ecommerce
