E-commerce transactions occur in developed markets (particularly in the United States, the United Kingdom, Northern Ireland, and Japan), developing countries have started to catch up recently, led by those in Asia where many have become important buyers and sellers of goods and services online. For example, the People’s Republic of China (PRC) now has the largest B2C market in the world, surpassing the United States. The PRC’s Alibaba Group has grown by 120% since 2013 and has 24,000 employees.

1. DIGITAL TRADE AS A NEW
REALITY
CREATED BY:
ENRIQUE ANDRÉS DEL CASTILLO enrique1995.eadc@gmail.com
MOHAMMAD ARIF 20jsia-marif@jgu.edu.in
EKATERINA BOGOMAZ boghomazk@mail.ru
Under the Supervision of Prof. Dr. Maarten Smeets
maartensmeets2@gmail.com

2. LATIN AMERICA

3. COVID-19 CONTEXT:
During the COVID-19 Pandemic, many countries in Latin America applied public containment measures that
drastically reduced mobility and economic activity in the region.
According to Google's community mobility information, In the second quarter, the employment rate decreased
by 10% and unemployment in the region increased by 2% in 2020, compared to 2019.
Factors such as unemployment, inactivity, fewer hours worked and a fall in income could generate more poverty
for 37.3% of the population of Latin America by the end of 2020. Added to a 27.5% reduction in exports during
the second quarter of 2020 compared to 2019.
Context:
Latin America-
Opportunities
and Challenges
in Digital Trade
Average
Daily
Consumpti
on Change
LATAM
(15/02/20
20-
31/01/202
1)
Source: Informes de Movilidad Local sobre
el COVID-19 (google.com)

4. Opportunities:
Due to the health emergency, many companies and consumers had to adapt to this new normal, so they
explored new markets, digital and online channels in order to continue operating and secure their sources of
income in the midst of the COVID-19 crisis.
Therefore, e-commerce and digital commercial transactions grew with notoriety along with the number of online
buyers due to new changes in consumer patterns and business model.
Latin America-
Opportunities
and Challenges
in Digital Trade
Value of Online Sales in Latin America in 2019 and 2024 (Billions of dollars):

5. Opportunities:
On the other hand, it is also necessary to develop digital multilateral trade rules and regulations
through Regional Trade Agreements (RTA). These Agreements should be worked together with
regional integration programs such as the Pacific Alliance and the APEC Forum.
The Trans-Pacific Partnership (TPP):
This Trade Agreement plays an important role in the inclusion of new regulations on digital commerce
for the Latin American region (Mexico, Peru, Chile). It also establishes the free flow of data, prohibits
the location of data and promotes privacy protection regulations. This agreement covers 12 different
provisions on digital commerce.
Latin America-
Opportunities
and Challenges
in Digital Trade

6. Opportunities:
Pacific Alliance:
The Pacific Alliance is a regional integration initiative made up of Chile, Colombia, Mexico and Peru.
This initiative prohibits the imposition of customs duties on digital commerce; however it allows
internal taxes and other charges. In addition to promoting interoperability between the regulatory
frameworks of the member countries and the inclusion of small and medium-sized companies in
digital commerce.
Although it lacks greater regulations and responsibilities of the internet service provider and develops
the issues with less detail compared to the TPP.
Latin America-
Opportunities
and Challenges
in Digital Trade

7. Opportunities:
Mercosur:
MERCOSUR is a regional integration process, formed by Argentina, Brazil, Paraguay and Uruguay,
Venezuela and Bolivia. This initiative does not have a common regulation on digital commerce.
MERCOSUR has implemented the Group for the Digital Agenda to develop debates on electronic
commerce and the digital economy. It also has the necessary mechanisms to incorporate digital
commerce regulations in the region and address crucial issues such as data transfer and protection,
intellectual property, and domain name disputes.
Latin America-
Opportunities
and Challenges
in Digital Trade

8. Challenges:
One of the main challenges for digital commerce in the Latin American region is
-Increase its penetration, connectivity, quality and affordability of Internet.
-Improve the capabilities of logistics and services networks and those of regulatory entities.
-Reduce informality to expand access to electronic payment methods.
-Improve interoperability for cross-border payments.
-Strengthen the electronic readiness of companies
-Have a common regional policy agenda for the creation of a regional electronic commerce market.
Latin America-
Opportunities
and Challenges
in Digital Trade

9. RUSSIA

10. E-COMMERCE IN RUSSIA
(BN. RUB)
Source: Russia’s participation in international trade. SPBU student publication 2021
Ed. by Maarten Smeets. — St. Petersburg: Skifiya-print 2021. — 188 p.
Source: E-commerce in Russia 2020:
https://datainsight.ru/sites/default/files/DI_eCommerce2020.pdf
THE FASTEST-GROWING E-
COMMERCE MARKETS IN 2020-24

11. TAX COMPETITIVE
ADVANTAGES OF
FOREIGN REMOTE
SELLERS
Differences in taxation in cross-border and domestic online sales often put Russian
online retailers in a less advantageous position
Direct purchase of goods from a
foreign supplier
If goods worth less than 200 euros are sent to Russia
by post, no customs duties are charged.
+
Import VAT (standard rate is 20 per cent) is also not
charged to retail buyers in the case of purchase for
personal consumption.
+
a remote exporter can return VAT

the final price of foreign goods for the Russian buyer
is only the cost of their production plus a small profit
for the manufacturer and distributor of the goods, as
well as the constantly decreasing cost of postal
delivery
The Russian online retailer supplies
goods to the foreign country (China)
Almost 70 per cent is added to the original price
of goods when crossing the Chinese border -
import VAT (17 per cent), consumption tax (its
rate varies between 1-56 per cent depending on
the type of commodity products, on average
about 42 per cent) and customs duty (about 10
per cent)
+
the previously withheld and included in the
customs value Russian VAT of 20 per cent is
impossible to compensate for when exporting
through electronic trading platforms in retail
format

The price of Russian goods intended for the
Chinese market is almost twice the price of
those for the domestic Russian market  these
products cannot compete with similar goods
made in China.
The Russian budget suffers from
1)the loss of potential import customs duties and
import VAT
2)the reduction in tax revenues from the incomes of
large importing companies and individuals employed
in the import-oriented sector of the national
economy.
Source: Adapting to the digital trade era: challenges and opportunities: https://www.wto.org/english/res_e/booksp_e/adtera_e.pdf

12. TAX COMPETITIVE
ADVANTAGES OF
FOREIGN REMOTE
SELLERS
The difference in VAT and excise rates
between the EAEU
the excise duty on beer in Russia is twice the duty in
the Republic of Belarus, and almost two and a half
times the duty in Kazakhstan
+
noticeable difference in the standard VAT rate, which
in Russia and Belarus is 20 per cent, and in Kazakhstan
only 12 per cent.

beer ordered in Belarusian or (especially) Kazakhstani
online stores delivered to the Russian consumer will,
due to differences in national tax rates, be significantly
cheaper compared to the retail price in Russia.
The solution to this problem lies in the tax
harmonisation process in the EAEU.
This process has already begun: from 1 January 2019 in
the EAEU countries, a single customs tariff for imported
parcels has been introduced (Pro2019god, 2019), and
the harmonisation of VAT and excise duties is the next
step.
The agreement to establish a single excise duty rate on
alcohol and tobacco products by 2024 has been
approved.
Sources:
Adapting to the digital trade era: challenges and opportunities: https://www.wto.org/english/res_e/booksp_e/adtera_e.pdf
Zondov K. Kh., Ionicheva V. N. On the problem of harmonization and unification of indirect taxation when importing goods into the EAEU // RPE. 2021. No. 6 (128). URL: https://cyberleninka.ru/article/n/k-probleme-garmonizatsii-i-unifikatsii-kosvennogo-nalogooblozheniya-pri-vvoze-tovarov-v-eaes.
Eurasian Economic Commission: On harmonisation of excise duty rates in the EAEU: http://www.eurasiancommission.org/ru/act/finpol/dofp/nalog/Documents/akciz.pdf
Member State
of the EAEU
Base
VAT rate on the
import of
goods
Preferential
rate for the
import of
goods
Republic of
Belarus
Article 102 of
the Tax Code of
the Republic of
Belarus
20% 10%
The Republic of
Kazakhstan
Article 422 of
the Tax Code of
the Republic of
Kazakhstan
12 % -
Russian
Federation
Article 164 of
the Tax Code of
the Russian
Federation
20% 10%
Republic of
Armenia
Article 63 of the
Tax Code of
Armenia
20% -
Kyrgyzstan
Article 227 of
the Tax Code of
Kyrgyzstan
12% -

13. THE TAX OF
CROSS-BORDER E-
COMMERCE IN
TERMS OF TRADE
IN DIGITAL
CONTENT
VAT levied on foreign exporters of
electronic services and products,
so-called «Google tax» (B2C)
This tax has a clearly expressed fiscal orientation:
after the introduction of the “Law of Google tax” in
2018, foreign internet companies in Russia paid RUB
12 billion VAT on sales of electronic content to
individuals, and the amount of VAT paid to the
Russian budget after the appearance of the Law
increased in 2018 by 28%.
Foreign companies that remotely
supply electronic services to Russia
must pay VAT when working with
corporate customers (B2B)
The problem is that even transactions related to
the provision of cross-border electronic services
within the same corporate structure fall under
the Russian "Google tax”.
Foreign companies delivering their digital
products and services in Russia via the mode of
remote access from abroad had to register with
the Federal Tax Service of Russia (FTS) to pay the
“Google tax".

Under the circumstances, transnational
companies will not wish to establish subsidiaries
in Russia, with a resulting loss in investment and
technology transfer.
Presumably the imposition of VAT on B2B
services will reduce Russian firms’ access to new
technologies.
the definition of electronic services in the Russian
legal field is blurred

many documents, including licences and technical
contracts, come under the law
Source: Adapting to the digital trade era: challenges and opportunities: https://www.wto.org/english/res_e/booksp_e/adtera_e.pdf
Russia’s participation in international trade. SPBU student publication 2021 Ed. by Maarten Smeets. — St. Petersburg: Skifiya-print 2021. — 188 p.

14. POSSIBLE
SOLUTIONS
• At present, due to the limited importance of e-commerce, including
cross-border, the fiscal effect of its taxation on national budgets is
insignificant. Thus, the tax regulation of cross-border e-commerce
should not focus on increasing the collection of direct and indirect
taxes, but rather should seek to support the rapid growth of e-
commerce activities.
• The task of the tax regulation of e-commerce operations in Russia
with tangible goods is to create equal competitive conditions for
domestic and foreign internet sellers by levelling the low tax burden
of remote retailers from countries that actively stimulate their
exports. At the same time, increasing the fiscal burden on imports
through online stores should be a goal approached with caution, as
higher prices due to higher taxes would have a negative impact on
consumers, reducing their disposable income.
• Refinement of tax regulations in the section on foreign trade in
services.
Source: Adapting to the digital trade era: challenges and opportunities: https://www.wto.org/english/res_e/booksp_e/adtera_e.pdf

15. ASIA

16. GLOBAL RISE OF E-COMMERCE
E-commerce transactions occur in developed
markets (particularly in the United States, the
United Kingdom, Northern Ireland, and Japan),
developing countries have started to catch up
recently, led by those in Asia where many have
become important buyers and sellers of goods
and services online. For example, the People’s
Republic of China (PRC) now has the largest
B2C market in the world, surpassing the United
States. The PRC’s Alibaba Group has grown by
120% since 2013 and has 24,000 employees.
16

17. ASIA’S E-COMMERCE AND DIGITAL MARKET GROWTH
Asia, with its growing middle class
and increasing internet penetration,
is at the forefront of global e-
commerce dynamism. The region
accounted for 57.4% of global e-
commerce sales (business-to-
consumer) in 2019. According to
Statista, Asia’s e-commerce revenues
are predicted to grow by 22.4% to
USD1.36 trillion in 2020 and reach
USD 1.92 trillion by 2024. By then,
Asian economies will account for
61.4% of the global e-commerce
market.
17

18. ASIA IS THE WORLD’S LARGEST E-COMMERCE (B2C) MARKET
18

19. RAPID GROWTH IN ASIA’S ECOMMERCE (B2C) MARKETS
CHINA IS A MARKET LEADER IN TERMS OF SIZE, THE E-COMMERCE MARKETS IN INDIA AND INDONESIA THE WORLD’S
SECOND AND FOURTH MOST POPULOUS COUNTRIES, RESPECTIVELY – ARE EXPECTED TO ENJOY DOUBLE-DIGIT
GROWTH RATES IN THE COMING YEARS
9

20. RAPID E-COMMERCE GROWTH IN SOUTH EAST ASIA
Percentage Of Consumers Using Mobile Payments In Stores 2019
20

21. INDIA E-COMMERCE AND DIGITAL MARKET
21

22. INDIAN GOVERNMENT INITIATIVES
SINCE 2014, THE GOVERNMENT OF INDIA HAS ANNOUNCED VARIOUS INITIATIVES, NAMELY DIGITAL
INDIA, MAKE IN INDIA, START-UP INDIA, SKILL INDIA AND INNOVATION FUND. THE TIMELY AND
EFFECTIVE IMPLEMENTATION OF SUCH PROGRAMS WILL LIKELY SUPPORT GROWTH OF E-COMMERCE IN
THE COUNTRY.
AS OF SEPTEMBER 27, 2021, THE GOVERNMENT E-MARKETPLACE (GEM) PORTAL SERVED 7.65 MILLION
ORDERS WORTH RS. 140,648 CRORE (US$ 19.09 BILLION) TO 54,699 BUYERS FROM 2.8 MILLION
REGISTERED SELLERS AND SERVICE PROVIDERS.
THE CONSUMER PROTECTION (E-COMMERCE) RULES 2020 NOTIFIED BY THE CONSUMER AFFAIRS
MINISTRY IN JULY DIRECTED E-COMMERCE COMPANIES TO DISPLAY THE COUNTRY OF ORIGIN ALONGSIDE
THE PRODUCT LISTINGS. IN ADDITION, THE COMPANIES WILL ALSO HAVE TO REVEAL PARAMETERS THAT
GO BEHIND DETERMINING PRODUCT LISTINGS ON THEIR PLATFORMS.
22

23. LATEST DATA OF E-COMMERCE AND DIGITAL MARKET
Indian online grocery market is
estimated to reach US$ 18.2 billion in
2024 from US $1.9 billion in 2019,
expanding at a CAGR of 57%. India's e-
commerce orders volume increased by
36% in the last quarter of 2020, with the
personal care, beauty and wellness.
India's consumer digital economy is
expected to become a US$ 800 billion
market by 2030, growing from US$
537.5 billion in 2020.
23
E-retail market is expected to
continue its strong growth - it
registered a CAGR of over 35% to
reach Rs. 1.8 trillion (US$ 25.75
billion) in FY20. Over the next five
years, the Indian e-retail industry is
projected to exceed ~300-350 million
shoppers, propelling the online Gross
Merchandise Value (GMV) to US$
100-120 billion by 2025.
INDIAN E-COMMERCE MARKET SIZE INVESTMENTS/ DEVELOPMENTS

24. INDIAN MARKET IN LATEST GRAPH
24

25. CHALLENGES AND SUGGESTIONS
the absence of national
legislation to support cross-
border e-commerce. poor ICT
infrastructure, trade facilitation
and logistics, e-payments, and
inadequate skills development.
National strategies to
understand the underpinnings of
e-commerce are also lacking in
many countries.
25
Governments must balance short-term
costs such as the risk of losing tax
revenue, the risk of job losses, and the
risk of widening divides against potential
long-term gain. inadequate ICT
infrastructure and power supply, limited
credit card usage as a payment option,
underdeveloped financial systems, and a
lack of purchasing power, which must
first be addressed for an online economy
to function well.
CHALLENGES SUGGESTIONS

27. THANK YOU FOR YOUR ATTENTION!