Govt urged to address e-commerce constraints

The government must address several challenges as part of efforts to effectively develop e-commerce and make trade more efficient, a recent study reveals.
The 2018 study, funded by the World Bank, Australia, Germany, the European Union and Ireland names the main challenges as limited internet access, the high cost of internet service, and inadequate regulation.
Insufficient IT infrastructure along with high trade facilitation and logistics costs are also identified as obstacles to the development of e-commerce, according to the study, which is titled “Taking the Advantage of E-commerce”.
In relation to a legal and regulatory framework, the government needs to improve some areas of its trade policy to enable greater participation in e-commerce by this sector. At present, commerce takes place using analogue systems, the study noted.
The government also needs to develop a legal framework for consumers participating in e-commerce and draw up legislation on the protection of personal data.
One of the most important issues highlighted by the study is that the government does not have a proper mechanism in place to tax e-commerce, and such a mechanism must be urgently set in motion.
But this mechanism and associated policies should be carefully thought out as a high rate of taxation and strict policies would discourage investment and the operation of e-commerce. Laos should take a cautious approach to imposing new taxes on e-commerce.
Regarding trade facilitation, the government needs to undertake further reform to avoid imposing undue costs on small firms or businesses trying to enter into e-commerce.
The earliest area of growth in international e-commerce would likely be cross-border trade, the study suggests. But small firms and entrepreneurs are least equipped to manage costs related to shipment delays, lack of transparency, and unpredictable regulations.
Clarification of the regulations relating to low-value imports and a formal framework to streamline the process are necessary, the study states. The establishment of a transparent and consistently applied procedure for handling low-value cross-border trade is essential.
To successfully develop e-commerce, the study suggests that Laos should implement relevant Asean approaches to regulatory issues related to e-commerce, with a special focus on consumer protection, privacy, and electronic signatures.
The government must also move away from the submission of paper documents for trade clearance and adopt the use of electronically created documents. Also advised is the application of risk management principles in processing cross-border shipments.
One of the most important recommendations made by the study is to confirm the leadership role of the Ministry of Industry and Commerce in coordinating the e-commerce agenda.

By Ekaphone Phouthonesy
(Latest Update May 7, 2019)