A Bird’s Eye View

Abstract

Globalization and the dominion of the Internet have confounded traditional international tax systems. Unprecedented tax issues flowing from eCommerce, powered by continuously mutating technology represent the central agenda for the next generation taxing regime. The continuing attempt to impose ‘basic economic laws’ on an environment which defies such laws is a futile exercise. Critical points at issue are: ‘source’; ‘residence’ and the virtual world; harmonization; internationally equitable and effective imposition of tax in respect of eCommerce; privacy; introduction between VAT and non-VAT jurisdictions and administrative issues. A further problematical point at issue in respect of eCommerce is the question of tax avoidance or tax evasion. The concept of ‘presence; in the virtual world is a cogent point at issue as is the concept that being ‘here’ and ‘there’ within the context of the virtual world is synchronically possible. Such challenges demand that taxing solutions should have the flexibility to adept to the impact of currently unimaginable technological amelioration. It is submitted that VAT’s superior efficiency and potency in the virtual world of cyberspace can be demonstrated in a comparative analysis with income tax principles and the application thereof to practical examples.