7 months ago
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JAKARTA, Indonesia, April 25, 2024 /PRNewswire/ -- Following the World Trade Organization (WTO)'s agreement to renew the WTO Moratorium on Customs Duties on Electronic Transmissions (Moratorium) until 2026 at the 13th Ministerial Conference (MC13) in Abu Dhabi in March, the coalition for the Digital Prosperity for Asia (DPA), Asosiasi Industri Animasi Indonesia (AINAKI), Asosiasi Jaringan Cerdas Indonesia (PJCI), and Asosiasi Prakarsa Indonesia Cerdas (APIC) sent a letter to Indonesia's Ministry of Finance, Ministry of Trade, and Ministry of Foreign Affairs showing its appreciation for the Indonesian government's support for the Moratorium's renewal.
The Moratorium maintains that customs duties should not be imposed on electronic transmissions. WTO members have periodically agreed upon this Moratorium since 1998. With this renewal, the Moratorium will remain in place until the WTO's 14th Ministerial Conference on March 2026.
Representing digital small-medium businesses across the Asia-Pacific region, the DPA submitted the letter on behalf of its Indonesian members and various industry representative groups that support the Moratorium's extension. Previously, the DPA had sent an initial letter to the ministries advocating for the Indonesian government's support for the Moratorium's renewal.
In both letters, the DPA emphasized the importance of an enabling regulatory ecosystem that ensures accessibility to digital services for the more than twenty million Indonesian micro, small, and medium enterprises (MSMEs) across all industry sectors. The DPA believes that the Indonesian government's support has been and will continue to be a driving force behind an inclusive and strong digital economy in Indonesia.
Had the Moratorium lapsed, Indonesia's MSMEs would face increased business and administrative costs that may hinder their long-term growth. These include potential restrictions, licensing requirements for digital exports or customs duties, or formalities for digital imports—exacerbating the already narrow business margins faced by MSMEs and impacting growth in the long run.
The Moratorium enables Indonesian businesses to 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—top exporters—that rely on cloud technologies for operational efficiency, accuracy, and security. Indonesia's online service platforms, including the two decacorns and unicorn tech startups, are also foundationally reliant on seamless cross-border data flows to grow and export their products and services to Southeast Asia and beyond.
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.
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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