ABSTRACT
So how are tax questions researched? It is important that I explore this. The tax system should be clear so that the taxpayer can see in advance how much tax must be paid. Second, enforcement should be consistent and universal. There is nothing more destructive of a taxpayer’s morality than the suspicion that others are not paying. This means that people should be able to understand the rules. This thought leads to another of the paradoxes of tax. The simpler the rules are, the less fair they are. But the fairer they are, the more complex they are. The more complex they are, the harder they are to understand and to put into effect. There is another matter; although the effectiveness of a tax system depends upon its enforcement, it also relates to cost-effectiveness. This chapter states in broad terms the economic objectives and principles that should guide the taxation of e-commerce. It presents different proposals and options for reforming the taxation of e-commerce derived from those objectives and principles. In these circumstances, it seems an imperative for the taxing authorities to examine their approach and policies towards the taxation of e-commerce more comprehensively than they have to date. I am of the view that the attention of the taxing authorities should not simply focus upon the location and function of servers, characterization of income and the place of consumption. Instead, the analysis should extend more broadly to ensure a deeper understanding of the nature of e-commerce as it is today and as it will develop tomorrow.
