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'.
Wood Dale Chicago prom limo .. Lockport Chicago limo O’HareIf your business has employees, you must pay employment taxes.... Read More
While accountants are reaching for aspirin, millions of Americans are... Read More
In the latest Star Wars episode, the evil empire executes... Read More
"What we've got here is a failure to communicate." ... Read More
As your business grows, you are going to need help.... Read More
Reservists called to active duty and enlistees in the armed... Read More
In the largest criminal tax case ever filed, KMPG has... Read More
As we enter mid-March, taxpayers begin to become very interested... Read More
April 15th looms in front of most people every year... Read More
In elementary school, kids come up with creative excuses why... Read More
On June 3, 2005, the IRS released guidance on charitable... Read More
An early distribution from an Individual Retirement Arrangement (IRA) or... Read More
Assume a buyer in Pakistan downloads software from the Internet... Read More
Each year, the IRS lists various scams taxpayers get caught... Read More
If your like many, you don't always understand what people... Read More
Often people fall on hard times and stop paying on... Read More
The powers of Congress, and the limitations set upon those... Read More
Newlyweds and the recently divorced should make sure that names... Read More
"Deducting Meals and Entertainment"O.K. You've been working really hard on... Read More
Over 50% of marriages end in divorce in the United... Read More
As a small business owner, it's wise to familiarize yourself... Read More
Marketing is a necessary expense in running practically any business... Read More
Q: I was contacted by the city tax collector to... Read More
You're at your office, or home, and the doorbell rings... Read More
IRS Tax forms can be confusing.Am I a 1099 or... Read More
Antigo wedding limo ..Haven't done your taxes yet? No problem. Now there is... Read More
All states also have their own tax system. Typically there... Read More
As your business grows, you are going to need help.... Read More
In the rush to get tax returns prepared and filed... Read More
Whether helping the kids with a down payment on their... Read More
"Deducting Meals and Entertainment"O.K. You've been working really hard on... Read More
We all love to criticize the IRS, don't we? And... Read More
No one likes paying tax. Everyone understands that tax is... Read More
Have you been thinking about incorporating your small business or... Read More
Reservists called to active duty and enlistees in the armed... Read More
Hit a big one? With more and more gambling establishments,... Read More
Many Americans believe that an IRS debt is a debt... Read More
If you paid someone to care for a child so... Read More
With gas prices at an all time high before Hurricane... Read More
Do you realize that some tax forms ask you to... Read More
As everyone in the U.S. knows, we have just passed... Read More
It's that time again, the April 15 tax deadline is... Read More
The means and types of businesses have transformed with advent... Read More
How Home-Based Businesses Can Avoid Giving Uncle Sam... Read More
An early distribution from an Individual Retirement Arrangement (IRA) or... Read More
Deducting Your Auto ExpensesAuto deductions are a very complex topic.... Read More
The 100 year old investment-banking firm of... Read More
In trying to comply with tax laws for your e-business,... Read More
In a past article I relayed the plight of the... Read More
Many small businesses complain when confronted with the expense of... Read More
Tax |