Institute for International Trade

Policy & Engagement 

WORKING PAPER No. 15

The Value of Cross-border Digital Transmissions 
to MSMEs in Indonesia: Implications for Participation in the WTO E-commerce Moratorium

Cross-border digital transmissions are crucial components of the global trading system. Currently, WTO members do not impose taxes on inward flows, in-keeping with the WTO’s temporary moratorium on e-commerce taxation. However, it is possible this moratorium will expire after the next Ministerial Conference, and key members may move to impose taxes in the future. As our latest Working Paper attests, in Indonesia’s case this would amount to significant self-harm, particularly for Indonesia’s vibrant micro, small, and medium enterprises sector. The study models economic impacts of potential digital trade taxes for Indonesian MSMEs, and concludes that digital taxes would undermine jobs, employment, productivity, and economic growth. The authors advocate for Indonesian policy makers to resist implementing digital trade taxes.

The views expressed here are the author’s alone and not those of the Institute for International Trade.