The means and types of businesses have transformed with advent of era of e-commerce, resulting in global seller and buyer. The Internet offers consumer choice, business efficiency and recreation.
As a means of global communication it is so powerful in operation, yet so simple to use. Coupled by these benefit, there have emerged legal issues e.g. conflict of laws, consumer protection, securities and privacy, etc and to address these issues, we have to make amendments in substantive and procedural laws for providing legal framework for collection of taxes generated by e-commerce activities.
The tax statutes have provided us the details of sources of source of income but these vary according to the particular category of income in question. The critical question for electronic commerce taxation is how to analogize those transactions to the transactions in conventional commerce that are addressed in the tax statutes.
The determination of question of issue of territorial jurisdiction is also a crucial concern in e-commerce taxation. Rather the e-businesses which are falling in Pakistani tax jurisdiction for purposes of imposition of taxes or not.
The CBR can tax only Pakistani source of trade or business income of foreign individuals and corporations only when such income is attributable to a "fixed base" but the jurisdiction in cyber space is multi-dimensional, it could be at the residence of the seller or buyer or data encryption place. These are many tricky questions of jurisdiction which our existing tax statutes are ineffective to address them. We need here to make amendment in our tax statute for extension of Pakistani jurisdiction in cyberspace.
The record can be hosting at any jurisdiction, and application of retention and maintenance of record often arise legal issues which could only be solved according prevailing laws of the web hosting state. Legal issues arise when sellers or services providers choose to share the data with remote web server whose whereabouts is not known.
In current conditions, there is need for the CBR approval for keeping, maintenance, destruction and production of the storage of records electronically in prescribed manner and to have confidence in the processes and methodology used to store records electronically.
The CBR could simply retain the power to promulgate acceptable standards of electronic record keeping for tax purposes and to produce these records before court opens many legal questions. We don't have any extrinsic resources available for auditing, verifying and authenticating these records. Here we need reconstruction of statute for removal of inadequacy of tax laws. The booking requirement is useless unless the records are not accessed for the purposes of verification.
How to access the e-records hosted at a remote place? Rather the CBR have the administrative facility to access, verify, authenticate and provide the certified copies to court of law of these records. There are many advance devices with revenue authorities in advanced states like computer forensic, encryption and clipper chip for accessing these states but our tax statutes is silent on the establishment of these modern devices. What is recommended here that we should make these modern devices the part of tax statute for smooth and efficient running of tax administration.
Self-assessment relies on taxpayers voluntarily meeting their tax obligations. The self-assessment environment in the light of electronic commerce is causing the emergence of legal issues of compliance of tax return.
In e-commerce, deduction and location of the identity of persons behind the e-business is most crucial issues in tax compliance and electronic cash and e-money is accentuating existing problems. Here we need to redefine our tax statute in order to enhance the administrative requirement for meeting the statutory inadequacy.
The growing menace of tax evasion, mitigation and avoidance is too easy in electronic commerce technology and to curb this aggravating problem, the modern technologies are employed for the purpose of eliminating tendencies of avoidance but no anti-avoidance devices are used e.g. digital discovery authorities, computer forensic and surveillance authorities etc. These modern impartial authorities are often made part of the tax administration for the purpose of enhancing their efficiency and reducing tax avoidance.
We have legged behind in regulation of e-commerce taxation in the world. We need to reconstruct our tax statute at par with other countries within the framework defined by the UNICITRAL, the WTO, the OECD and the EU. UNICITRAL has provided the model laws for member states for avoidance of conflict of laws among them.
The writer is an advocate of High Court and practicing immigration and corporate laws in Pakistan since September 2001. He is a self employed and pioneer in research on electronic commerce taxation in Pakistan. His articles were published widely in the critical areas of cyber crimes, electronic commerce, e-taxation and various other topics. He wrote LL.M thesis on titled "Legislation of electronic commerce taxation in Pakistan" in which he provided comprehensive legal proposals for statutory reconstruction of tax laws for purpose of imposition of taxation on e-business in Pakistan. Currently he is conducting is research on topic 'Electronic commerce taxation: emerging legal issues of digital evidence'.
one time home cleaning Highland Park ..As everyone in the U.S. knows, we have just passed... Read More
The 100 year old investment-banking firm of... Read More
If you are a Small Business Owner or Self-Employed Person,... Read More
The Internal Revenue Service is reporting that the difference between... Read More
Do you realize that some tax forms ask you to... Read More
If your identity is stolen, your finances can quickly become... Read More
As a small business owner, it's wise to familiarize yourself... Read More
Managing a business small, medium or big requires you to... Read More
How Home-Based Businesses Can Avoid Giving Uncle Sam... Read More
So, you were pleasantly surprised to learn that you are... Read More
As a sole proprietor, it's wise to familiarize yourself with... Read More
If you have recently started an Internet or home business,... Read More
Excerpted from the new book, "How to Do Space Age... Read More
Strategic planning throughout the year results in a minimal tax... Read More
The Internal Revenue Service has certified the 2006 Toyota Highlander... Read More
OverviewIn the Pre-Budget Report of December 2003 the Chancellor Gordon... Read More
Deduction of Refinance PointsAny points that you pay in the... Read More
Just image, you are a small manufacturing company, business has... Read More
In the latest Star Wars episode, the evil empire executes... Read More
Background issues of access to recordsTo assess the records at... Read More
Taxpayers have two easy and convenient options for getting copies... Read More
As tax time approaches, many home-based business owners begin completing... Read More
If you have employees, you are responsible for paying a... Read More
According to the IRS, taxpayers underpay their taxes by some... Read More
Reservists called to active duty and enlistees in the armed... Read More
licensed cleaning services Park Ridge ..As teachers and students head back to school following a... Read More
Small Businesses Filing Amended Federal Tax Returns to... Read More
Media reporting of a new EU savings tax directive has... Read More
All tax authorities to e-commerce transactions should investigate the record... Read More
Many small businesses complain when confronted with the expense of... Read More
Emerging Legal issues of Tax compliance of e-business Self-assessment system... Read More
Does this scene sound familiar? It's April 7. You haven't... Read More
Whether helping the kids with a down payment on their... Read More
Many taxpayers are confused about how long they should keep... Read More
If your business has employees, you must pay employment taxes.... Read More
One of the most important, but least understood or appreciated... Read More
The 100 year old investment-banking firm of... Read More
Are you in the middle of a disagreement with the... Read More
Anyone who is closely related to an accountant knows that... Read More
Knock-Knock-KnockWho's there?The IRS!The next quarterly payment of estimated income tax... Read More
Millions of people file tax return extensions every year. The... Read More
As everyone in the U.S. knows, we have just passed... Read More
An early distribution from an Individual Retirement Arrangement (IRA) or... Read More
It's a major fear for most Americans: A notice from... Read More
Let's assume that you would like to begin saving for... Read More
1812The first attempt to impose an income tax on America... Read More
You've been feeling uneasy (perhaps even guilty) because you've failed... Read More
One can never underestimate the enthusiasm that politicians have for... Read More
If you are a Small Business Owner or Self-Employed Person,... Read More
According to the IRS, taxpayers underpay their taxes by some... Read More
Tax |