Tech Group Calls Out Countries on Taxes, Duties Imposed on ICT Products
The Information Technology and Innovation Foundation (ITIF) ranked 125 countries on the amount of taxes and duties applied to information and communications technology goods in a report released on Oct. 27, the organization said (here). Thirty-one countries currently impose taxes and duties that exceed 5 percent of information and communities technology products, and Bangladesh, Turkey, Brazil, Iran and Argentina are considered the “worst offenders,” said the ITIF.
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Governments frequently use ICT tariffs "in the mostly vain pursuit of protecting domestic industries" despite that, "when businesses face extra costs for importing goods, this gets reflected in their subsequent export price-- hurting their competitive position," ITIF said in the report (here). Goods in the ICT sector are also seen by governments as an easy source of tax revenue as the products are considered as more of a luxury, it said. "These added costs limit ICT adoption and the productivity increases associated with it," it said. "If countries resist the temptation to impose excess taxes on ICT goods and services and eliminate ICT tariffs, they will reap the benefits in broader digital adoption by businesses and consumers, leading to faster economic growth and increased quality of life."
The ITIF has spearheaded for years expansion of the Information Technology Agreement (ITA). The parties to the ITA, which total in the dozens, haven’t broadened the list of duty exempt products since the agreement’s 1996 inception despite many IT industry developments. The U.S. and China continue to battle over product concessions in expansion talks, and the ITIF is pushing for a major widening of tariff exemptions for technology products.