Microsoft seeks e-commerce tax freeze

With the latest ministerial round of the World Trade Organization (WTO) negotiations happening in its own backyard later this month, Microsoft is pushing for support for several issues including a ban on e-commerce tariffs.

A Microsoft lawyer has said the company is supporting efforts to permanently ban tariffs on electronic commerce, to enforce internationally agreed upon laws to battle software piracy, and to clarify tariffs for software.

"By the year 2002, the value of all worldwide e-commerce could approach $US500 billion," said Brad Smith, Microsoft's general counsel for international law. "And we don't want to see a rise in protectionism that would slow that value." International software sales will amount to billions of additional dollars and are equally sensitive to free trade issues, he said.

There is a good chance the WTO ministers may approve the measures proposed by Microsoft at their meeting, starting November 29, Smith said.

The US House of Representatives has already passed a resolution calling on the Clinton administration to seek a permanent moratorium on e-commerce tariffs, and the administration plans to lobby the WTO to approve the measure. "I'm quite optimistic there is worldwide appreciation for the development of electronic commerce," Smith said.

The WTO should also endorse existing international intellectual property laws to discourage software piracy, Smith said. "Governments have to ensure that intellectual property rights are enforced and that cases are brought into courts and prosecuted," he added.

The WTO also needs to establish a standard for setting tariffs and duties on software, Microsoft's Smith said. Right now, software can be taxed as intellectual property or as the physical container it comes in, such as a CD-ROM, Smith said. Microsoft would prefer to have the tariff levied on the physical container, he added.

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