Aussies discover regulatory arbitrage...
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From today's Australian Financial Review.
http://www.afr.com.au/content/970829/inform/inform1.html ATO urges no Internet slug _By Hans van Leeuwen_ The Australian Tax Office's attempt to tax electronic commerce should include no new taxes and as little extra red tape as possible, according to the recommendations of a major ATO report to be released today. The report, _Tax and the Internet_, urges close monitoring of some key industries with a growing Internet presence -- including computer software, news and information, recorded music, gambling, travel services and retail goods. But its emphasis is on creating a tax and regulatory environment that keeps the online industries in Australia, rather than driving them to more lenient tax jurisdictions. The report will be the basis for discussions with the information industry on how the ATO can prevent the undermining of the tax base by electronic commerce. The report said the ATO would need to tax and regulate the Internet only in concert with other countries if it was to encourage online businesses and industries in Australia. "As the Internet allows electronic payment system providers to locate their operations anywhere in the world, they might choose to flee a jurisdiction that unilaterally introduces a strong regulatory regime . . . Unilateral action may be more damaging than no action," the report said. But the tax base must be protected, with electronic commerce posing a significant threat in the longer term to the revenue base of many taxes. "There are not too many existing taxes worldwide that are not vulnerable," the Tax Commissioner, Mr Michael Carmody, said yesterday. The recommendations to strengthen the tax policing of the Internet included: * Numbers displayed on websites. * Licence commercial internet sites ("webshops") and webshop hosts. * Introduce denomination limits for electronic cash, like those already existing for physical cash. * Review the current wholesale sales tax categories, given that new products were being thrown up by the process of digitisation. But Mr Carmody ruled out introducing any taxes on data flows, such as a bit tax, in the short term. "We don't see major advantages to that at the moment. For Australia to jump immediately to a bit tax would just drive Australian business out of the country," he said. The report said electronic commerce threw up some tough challenges to tax administrations, including the difficulty in identifying the parties to an electronic transaction, the ability of cyber- businesses to store records offshore and encrypt them, and the removal of "middle men" -- such as wholesalers and brokers -- from the distribution process, who usually make the ATO's tracking of transactions easier. But Mr Carmody said the ATO would not be assuming that the reason businesses went online was to avoid tax. "It's just another medium of transacting business, which does not of itself say they're not going to meet their tax obligations," he said. "But there are concerns that the Internet opens up wider fields for those who are seeking to avoid their liabilities." _________________________________________________________________ [27]Back To Top _© This material is subject to copyright and any unauthorised use, copying or mirroring is prohibited._ --- end forwarded text ----------------- Robert Hettinga (rah@shipwright.com), Philodox e$, 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire' The e$ Home Page: http://www.shipwright.com/
=snip=
ATO urges no Internet slug
_By Hans van Leeuwen_
The Australian Tax Office's attempt to tax electronic commerce should include no new taxes and as little extra red tape as possible, according to the recommendations of a major ATO report to be released today.
=snip=
"As the Internet allows electronic payment system providers to locate their operations anywhere in the world, they might choose to flee a jurisdiction that unilaterally introduces a strong regulatory regime . . . Unilateral action may be more damaging than no action," the report said.
Duh. =snip=
"There are not too many existing taxes worldwide that are not vulnerable," the Tax Commissioner, Mr Michael Carmody, said yesterday.
The recommendations to strengthen the tax policing of the Internet included: * Numbers displayed on websites. * Licence commercial internet sites ("webshops") and webshop hosts. * Introduce denomination limits for electronic cash, like those already existing for physical cash. * Review the current wholesale sales tax categories, given that new products were being thrown up by the process of digitisation.
They don't seem to realize yet that it is about as easy to run a website hosted 5000K away as one down the street. This is fundamental. Some countries =will= attempt to regulate this commerce. I would be absolutely amazed if this were not so. The wonderful thing about this though is that it is just too damn easy to move a web site offshore to a location more friendly to commerce, so they will ultimately fail. The bad part about this is that there are few, if any restraining forces on government action in most places. Therefore, it is likely that any attempts to regulate internet commerce will be enforced for far longer than any person with a brain would continue to do to. Additionally, many companies will cave to the demands of whatever the jack-booted thugs demand so as to avoid harassment.
But Mr Carmody ruled out introducing any taxes on data flows, such as a bit tax, in the short term.
The last 4 words here are what is important. Why they think things will get better for them is beyond me. The ability to route around damage (in this case, taxes) is the strong point of the net. With any luck, this will continue to be true.
"We don't see major advantages to that at the moment. For Australia to jump immediately to a bit tax would just drive Australian business out of the country," he said.
Again, DUH.
The report said electronic commerce threw up some tough challenges to tax administrations, including the difficulty in identifying the parties to an electronic transaction, the ability of cyber- businesses to store records offshore and encrypt them, and the removal of "middle men" -- such as wholesalers and brokers -- from the distribution process, who usually make the ATO's tracking of transactions easier.
But Mr Carmody said the ATO would not be assuming that the reason businesses went online was to avoid tax.
Yet.
"It's just another medium of transacting business, which does not of itself say they're not going to meet their tax obligations," he said. "But there are concerns that the Internet opens up wider fields for those who are seeking to avoid their liabilities."
Don't you just love the way they try to make confiscatory taxes seem like the most natural and patriotic thing in the universe? <:) ------------------------ Name: amp E-mail: amp@pobox.com Date: 08/29/97 Time: 08:59:25 Visit me at http://www.pobox.com/~amp == -export-a-crypto-system-sig -RSA-3-lines-PERL #!/bin/perl -sp0777i<X+d*lMLa^*lN%0]dsXx++lMlN/dsM0<j]dsj $/=unpack('H*',$_);$_=`echo 16dio\U$k"SK$/SM$n\EsN0p[lN*1 lK[d2%Sa2/d0$^Ixp"|dc`;s/\W//g;$_=pack('H*',/((..)*)$/) == 'Drug Trafficking Offense' is the root passphrase to the Constitution. Have you seen http://www.public-action.com/SkyWriter/WacoMuseum ------------------------
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Robert Hettinga