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WTO May Extend E-Commerce Import Duty Moratorium
Pig Hogger writes "A meeting of World Trade Ministers would seem to propose an
18 month extension of the duty break that currently applies to cyberspace.
But the fact is, the duty break only applies to what is transmitted electronically, so therefore imposing duties on such would essentially be unenforcable by customs officials...
However, it is being proposed by the US that such a duty exemption be extended to the 'physical equivalent' of goods such as digital music and software. Can you spell MEDIA?" The story's from Fox News.
They should get their shit together and either impose duties or not, none of these extension shenanigans.. A lot of businesses are counting on duty-free e-commerce to continue in order to be successful.
Hopefully this is just the first step in governments realizing that there are no national boundaries on the internet and that attempting to enforce them is a waste of resources.
~Caliban
For the first time, we're seeing governments act intelligently. They don't know what is happening with the Internet, so they are taking a wait and see attitude. Catalogs had the opportunity to eliminate Brick-and-Mortar, they didn't.
A long-term decision would be unwise. Nobody knows what the future will bring for Cyberspace, and decisions can always be reversed. A 1.5 year decision is unlikely to be revisited until it is time to discuss an exemption. This allows the WTO to revisit the issue as the transistions are taking place.
In the long run, the Internet MAY make sales/VAT taxes irrelevant as geography becomes silly. On the other hand, if localities eliminate the tax advantage of E-businesses by eliminating VAT/sales taxes, then we may see a long term vision which involves both brick-and-mortar and E-businesses. The WTO is wise to take a wait and see approach.
Although I like having things be duty-free, I would really like to see an actual solution put in place. I am an e-commerce developer, and I would really prefer to have the law determined soon, even if it means paying a duty, so I do not have to go back and change my programs later. This also goes for the internet-sales-tax issue.
There is a bunch of information at this site and many others regarding the WTO and why there is a formidable protest being organised for the meeting in Seattle. Some folks down here in Dallas are organizing a demonstration to show solidarity with the Seattle protesters, we are few, but if you're interested and in Dallas, swing by the bulletin board at this site and hook up with us. It'd be great to see some people in different cities doing the same if they are unable to get to seattle.
Aaron said it was unlikely that proposal would be approved at the upcoming ministerial meeting, but he was optimistic an agreement could be reached before the next WTO ministerial meeting in three years.
Is it just me, or should maybe the World Trade Organization hold ministerial meetings just a tad more often than every three years? Don't get me wrong, I support their 'wait-and-see' approach, as it is almost a first in good government strategy. Almost always this approach is used exactly when it doesn't need to be by governments. But it's rather obvious they've taken to sticking their nose into internet trade, and if for no other reason than that, they should meet more often.
Who can keep up with something as fast-paced as the internet, and yet choose to meet that seldom?
This assuredly good news, but I'm a little disappointed that it even needs be discussed.
One thing that has been fundamentally obvious for a long time is that the new world of global telecommunications and "cyberspace" necessitates a serious legal rethinking. It's not at all clear "where" something happens or exists. The courts are decades behind the pace of technology at it is. In the 80s I ran a local BBS and came across this issue. If there is a legal dispute between two users, it was unclear whether the laws of the location of the BBS, the location of the accused, or the location of the accuser applied. I had imagined that this would be resolved by an act of congress within a few years. Yeah right. Over a decade later, the situation has become tremendously murkier, and no legal progress has been made.
We live in a world in which nobody knows where they are, or whose laws apply to them. A message travelling between two cities in Switzerland could go through half a dozen countries on the way. Or several dozen. And people imagine that they can even *define* an import or export, let alone monitor, regulate or tax them?!!
*click* *click*
I'm outside the US!
*click* *click*
Now I'm back in!
*click* *click*
Outside the US again!
What are you gonna do, tell my legions of electrons to stop at the router for an inspection? You'll find they're largely negatively charged from being spammed alot, but little else...
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Historically duties and sales taxes comes from the ancient marketplace. The sellers would pay a small fee to the market which would help to promote it and, crucially, guarantee and enforce a certain standard and a consistent set of rules for trade. (Big) Government has taken over the role as the overseer of trading standards and as the guarantoor of the order of the "marketplace". It has also taken the market tax.
However, in the internet age this approach is looking increasingly strange. I, as a consumer, can buy goods anywhere at the click of a mouse, and the government can not hope to regulate all and every market. And even if I knew the physical location of the seller (not a trivial thing) and even if the local government enforced a reasonable set of trading standards (obviously not true everywhere), it would be very difficult and expensive for me to actually seek redress in a local court.
The solution, in my opinion, is to return to the medieval market arrangement. Let us have private markets which regulate themselves, and let the consumers decide which markets to deal in. It is not a completely alien idea: most stock markets operate in this way (even if they are not exactly free from government regulation) and most of the online markets (e.g. e-bay, amazon, ...) have at least some rules and attempts at consumer protection.
The bad news for govenrment is that it will loose a lot of revenue. But it will also loose some of the responsibility (if it can ever give up power!) and therefore, presumably, costs. In the future governments will increasingly have to rely on taxing immobile value like land and buildings. Trade and people are both becoming too mobile.
Incidently the UK has a funny half-way house where I as a consumer can choose to sue my UK credit card company instead of the retailer for any disputes over a purchase. Interesting: as money become increasingly a branded commodity is this the way forward?
Hi!
Fundamentally what is a tax? A forced contribution to provide for public benefits which would be too difficult to charge for directly. E.g. laws/regulation, self-defense, public health information. etc. There are a couple of problems with taxing the internet, unlike federal roads computer networks are essentially privately owned (ignoring the academic/government bits) and (AOL/MSN/Yahoo notwithstanding) market forces have compelled players to interoperate, if only to get a slice of a larger pie.
Secondly, governments, despite their perception of gross stupidity, are not ignorant about the economic benefits of IT. Any one government that wants to put a tarriff/tax on IT traffic will find itself in a comparative disadvantage as firms immediately relocate their services offshore and land their fibre cables elsewhere. How many country towns disappeared due to newly created highways bypassing their locales?
Thirdly is what exactly is there to be taxed? Can you demand 20% of all the bits flowing along a wire? Can you have half a promise (essentially what money has now devolved to)? Much of the information that flows nowadays are transactions, or essentially bookkeeping activities between firms or internal transfers between business units of the same company. Calculating a dollar cost is a complex task. For its 10% GST impost, the Australian government tried to figure out a value-added-tax formula for financial transactions but gave up in the end.
As for juristiction, that is another whole can of worms that nobody wants to touch due to the headaches (and politics) involved. There will always be the odd-ball country that will refuse to play along (why do you think international tax havens exist?). Even if the US government unilaterally imposed the ol' greenback on the rest of the world with all the associated legal baggage, some smart cookie will find a solution to avoid confiscatory measures like establishing extra-territorial oil platforms beyond national maritine borders to host electronic services. Identities and paper corporations can be created faster than any countermeasure to crack down so it becomes a losing game. One can only look at corporations like Fox/News to see how shifting costs between countries can add extra value to the bottom-line.
As one wag used to say, he doesn't think the government is that efficient that its worth giving them more than the minimum required by law. Perhaps the only solution is to become rich then let public pressure and social stigma require individual voluntary contributions to non-profit causes.
LL
... is here
On a related gripe, I work in the World Trade center in Seattle - there are supposed to be 50 thousand people protesting that day...
I have this funny feeling that it is going to be difficult for me to get in that week.
Sales Tax is not the only way governments can get funded, and they are not the best by far.
Tax Sales are unfair cause they are not progressive.
Now on an 'ecological' point of view. Tax sales is an incentive for rich people to invest their money in finance instead of buying taxed goods. Income tax on the other side favors people with low income as they get more cash after tax than people with higher revenue for the same work provided
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Dev elpizw tipota, dev phoboumai tipota eimai lephteros http://euclidian.org
Aha! An automated complaint!
That crony thing gives it all away- as kickass as that script is the crony makes it reek of itself. That said, the WTO is _evil_ and to that guy that posted earlier about what a bummer day he will have crossing the line of protest to get to work in Seattle- BWAHAHAHAHAHAHAHAA!
Peace
Yeah, no shit... buh-bye State. Hello Money$$$! /-
-/ Hey, I really like Microsoft's slant on foreign trade policy, maybe I should invest some stock in them and get a copy of my license barcode tattooed to my ass- and of course I sure don't want to have any Jews in my closet when the MS squadron come calling, and our theme song is sure nice.
Awww, isn't that great. The WTO has delayed an e-commerce tax law! Waaaait a second.. Who the fuck is the WTO and how did they end up with the power to decide this shit for me?!
Open competetive markets ..\snip/.. better way forward than corrupt or corruptible government preference.
H'mmmm.
I must have missed the meeting where we decided that big business decided global law. Do you happen to have the minutes from it?
I see even classic Slashdot is now pretty much unusable on dial up anymore.
Robert X Cringely says Why the Internet Exemption From Taxes is Not Entirely a Good Thing.
He warns that it will lead to include an "Internet transaction" in your supermarket buy.
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Men with no respect for life must never be allowed to control the ultimate instruments of death.
GW Bu