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'.
executive chauffeured services Bradford .. Madison to Airport carThe Internal Revenue Service is reporting that the difference between... Read More
Each year, the IRS lists various scams taxpayers get caught... Read More
If your identity is stolen, your finances can quickly become... Read More
"Deducting Meals and Entertainment"O.K. You've been working really hard on... Read More
Your days as an entrepreneur and businessperson are consumed with... Read More
In elementary school, kids come up with creative excuses why... Read More
While accountants are reaching for aspirin, millions of Americans are... Read More
Knock-Knock-KnockWho's there?The IRS!The next quarterly payment of estimated income tax... Read More
It's a moment every person dreads. You pick up the... Read More
As teachers and students head back to school following a... Read More
In the rush to get tax returns prepared and filed... Read More
If your like many, you don't always understand what people... Read More
As everyone in the U.S. knows, we have just passed... Read More
At the present time a company incorporated in the Isle... Read More
Strategic planning throughout the year results in a minimal tax... Read More
Many small businesses complain when confronted with the expense of... Read More
Should I take wages or dividends from my privately owned... Read More
So, you were pleasantly surprised to learn that you are... Read More
Six Urban Myths ? Taxation"I am proud to be paying... Read More
How about a Tax Tip?As we all know Taxes are... Read More
You've been feeling uneasy (perhaps even guilty) because you've failed... Read More
The U.S. Department of Agriculture estimates that it costs nearly... Read More
NOTE: This is the first in a series of 5... Read More
Donating your used car to charity is a win-win situation;... Read More
According to the IRS, taxpayers underpay their taxes by some... Read More
O'Hare Chicago prom limo ..Are you in the middle of a disagreement with the... Read More
Own residential rental properties? This article discusses how income from... Read More
The powers of Congress, and the limitations set upon those... Read More
With gas prices at an all time high before Hurricane... Read More
The electronic transaction ordinance defines the certificated copies in which... Read More
While there are many equally valid reasons to incorporate, saving... Read More
The means and types of businesses have transformed with advent... Read More
Just image, you are a small manufacturing company, business has... Read More
As we enter mid-March, taxpayers begin to become very interested... Read More
Q: I was contacted by the city tax collector to... Read More
Ever wish that, as a business owner, you knew exactly... Read More
Marketing is a necessary expense in running practically any business... Read More
Whether helping the kids with a down payment on their... Read More
Anyone who is closely related to an accountant knows that... Read More
Donating your used car to charity is a win-win situation;... Read More
If you have employees, you are responsible for paying a... Read More
With the massive losses caused by Katrina, the economy of... Read More
Should I take wages or dividends from my privately owned... Read More
Adding Your First Additional Stream of IncomeMost new wealth builders... Read More
If your identity is stolen, your finances can quickly become... Read More
Emerging Legal issues of Tax compliance of e-business Self-assessment system... Read More
Recently, I stumbled across a concept that could change your... Read More
Employers often ask employees to designate the amount of tax... Read More
Practically every small business has receivables that it cannot obtain... Read More
As a small business owner or self-employed person, one of... Read More
Tax |