<div dir="ltr"><b><i><font><i><font size="-1">After Faraday discovered the basic principle of
electricity (electromagnetic induction in 1831), a sceptical politician
asked him what it (electricity) was good for. Faraday responded with
the following: "Sir, I do not know what it is good for. But of one
thing I am quite certain, some day you will tax it." :-)</font></i></font></i><br></b><br><br>I
think the real issue here is the question of what makes a particular
form of good or service taxable, despite its nature...i.e tangible or un-tangible, or is it the mode of delivery?<br><br><br>If 60% of businesses went online...what would happen to our tax revenue? KRA?<br><br><br>the EU introduced a new law in 2003
requesting non-EU e-commerce companies to pay VAT if they sold
goods within the European Union, including electronic transactions, while on the other hand the US have continued to push for a tax free
internet.<br>
<br>
<a href="http://www.opencongress.org/bill/110-h3678/show">http://www.opencongress.org/bill/110-h3678/show</a><br><br>This has greatly hindered business between these two continents(maybe its a power issue) but ,whether it should be destination or origin taxation...I think that <br>
EAC should look at it critically..... what works best....for it and its business transactions globally....this is bound to have a grand economic bearing.....are we importing more or exporting more?<br><br>My question is, how tax free is tax free?<br>
<br>Whenever you buy stuff from e-bay and amazon,you will pay tax..and when the goods are delivered,likewise.....so where does the free come in?<br><br>My Contribution.....lets pay tax....what I havent made up my mind on...is whether it should be destination or origin.<br>
<br>Kind Regards,<br><br><br><div class="gmail_quote">On Wed, Aug 20, 2008 at 8:22 AM, mwende njiraini <span dir="ltr"><<a href="mailto:mwende.njiraini@gmail.com">mwende.njiraini@gmail.com</a>></span> wrote:<br><blockquote class="gmail_quote" style="border-left: 1px solid rgb(204, 204, 204); margin: 0pt 0pt 0pt 0.8ex; padding-left: 1ex;">
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<p style="margin: 0in 0in 0pt; text-align: justify;"><span style="font-size: 12pt;">Morning, </span></p>
<p style="margin: 0in 0in 0pt; text-align: justify;"><span style="font-size: 12pt;"> </span></p>
<p style="margin: 0in 0in 0pt; text-align: justify;"><span style="font-size: 12pt;">Today we continue our discussions on economic issues.</span></p>
<p style="margin: 0in 0in 0pt; text-align: justify;"><span style="font-size: 12pt;"> </span></p>
<p style="margin: 0in 0in 0pt; text-align: justify;"><span style="font-size: 12pt;">As the internet becomes critical to global trade, there is debate as to whether governments should expand their tax base to include internet transactions.<span> </span>Internationally there have been proposals for the introduction of e-taxation based on the "Ottawa principles" of destination and origin taxation.<span> </span>Under the destination principle supplies of goods and services are taxed in the jurisdiction in which the goods and services are consumed. This means that exports are zero-rated, while imports are taxed.<span> </span>On the other hand under the origin principle supplies are taxed according to their origin. This means that exports are taxed but imports are not taxed.<span> </span></span></p>
<p style="margin: 0in 0in 0pt; text-align: justify;"><span style="font-size: 12pt;"> </span></p>
<p style="margin: 0in 0in 0pt; text-align: justify;"><span style="font-size: 12pt;">In your view what principle should be adopted in relation to e-commerce for developing countries? Should the internet be a tax-free zone or have special taxation treatment?</span></p>
<p style="margin: 0in 0in 0pt; text-align: justify;"><span style="font-size: 12pt;"> </span></p>
<p style="margin: 0in 0in 0pt; text-align: justify;"><span style="font-size: 12pt;">You are encouraged to contribute to previous discussion threads. <span> </span><span> </span></span></p>
<p style="margin: 0in 0in 0pt; text-align: justify;"><span style="font-size: 12pt;"> </span></p>
<p style="margin: 0in 0in 0pt; text-align: justify;"><span style="font-size: 12pt;">Reference:</span></p>
<p style="margin: 0in 0in 0pt 0.5in; text-indent: -0.25in; text-align: justify;"><span style="font-size: 12pt;"><span>1.<span> </span></span></span><span style="font-size: 12pt;">Internet Governance: Economic Issues Available at: </span><a href="http://textus.diplomacy.edu/textusbin/env/scripts/Pool/GetBin.asp?IDPool=629" target="_blank"><span style="font-size: 12pt;">http://textus.diplomacy.edu/textusbin/env/scripts/Pool/GetBin.asp?IDPool=629</span></a><span style="font-size: 12pt;"> [Accessed August 2008]</span></p>
<p style="margin: 0in 0in 0pt 0.5in; text-indent: -0.25in; text-align: justify;"><span style="font-size: 12pt;"><span>2.<span> </span></span></span><span style="font-size: 12pt;">Options for Taxing Imported Services.<span> </span>Available at: </span><a href="http://taxpolicy.ird.govt.nz/publications/files/html/gstimported/c4.html" target="_blank"><span style="font-size: 12pt;">http://taxpolicy.ird.govt.nz/publications/files/html/gstimported/c4.html</span></a><span style="font-size: 12pt;"> [Accessed August 2008]</span></p>
<p style="margin: 0in 0in 0pt; text-align: justify;"><span style="font-size: 12pt;"> </span></p>
<p style="margin: 0in 0in 0pt; text-align: justify;"><span style="font-size: 12pt;"> </span></p>
<p style="margin: 0in 0in 0pt; text-align: justify;"><span style="font-size: 12pt;">Disclaimer: These comments are the author's own</span></p>
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