UK Directors Push for Tax Reform to Meet E-Commerce Challenge

Andrew Mair, Tax-news.com

20 March 2000

The UK Institute of Directors has published a new report called "E-Commerce and Taxation" which discusses the challenge for UK tax authorities posed by e-commerce, namely maximising tax revenue while at the same time ensuring increasingly mobile e-businesses do not move offshore.

Some of strategies suggested in the report, intended as a pre-budget nudge to the Chancellor, include:

• applying sales tax (VAT) equally to UK and foreign e-commerce sales
  
• particularly for digital goods such as music and software.
• taxing company profits based on where a company has a physical
• presence rather than where it is controlled.
• making internet sales tax (VAT) easier to administer.
• reducing the current 9% UK betting tax.
• abolishing the 0.5% stamp duty on UK share purchases.

According to the author of the Report, Richard Baron, "E-commerce challenges tax systems because the physical locations of decision-making and of the sale of many products no longer matter. We need sensible solutions which will make business happy to stay in the UK".

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