The Impact of the Internet and E-commerce on Tax Regimes in the Commonweath Caribbean

The Impact of the Internet and E-commerce on Tax Regimes in the Commonweath Caribbean

Introduction

Most, if not all, of the member states of the Commonwealth Caribbean

derive their right to tax from their Constitutions.[1] Section 48(1)

of the Jamaican Constitution, for example, provides that '…Parliament

may make laws for the peace, order and good government of Jamaica.'

The Courts have continuously interpreted this right as one that is not

unbridled and therefore, the governments of the region have to take

every step to ensure that enactments do not contravene the provision

of the Constitution.[2] The stance of the Court was aptly put by

Jackson JA in Inland Revenue Commisioners v. Lilleyman[3] "…the courts

need to be watchful for the constitutional rights of the citizens and

against any stealthy encroachments thereon…"

The power to tax, therefore, rests upon necessity and is inherent in

any sovereign legislature under its general legislative power.[4] The

necessity being to provide the government with revenue necessary to

meet its expenditure, thus satisfying the social, political and

economic needs of its people. An erosion of the region's tax base will

therefore be an issue of major concern.

Globalization has impacted upon the region and as a result there has

been a concerted thrust by most of the member states, to come together

to attain a sustainable competitive advantage in the international

marketplace.[5]

Perhaps the aspect of globalization that has impacted most on the

region is the Internet and E-commerce. The United States Internet Tax

Freedom Act defines electronic commerce as meaning: "any transaction

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...sive taxpayer."

Caribbean Law Review.

[35]As available at

http://www.iofc.net/sovereign/story.asp?storyname=13905 (accessed 3rd

November 2003)

[36] It should be noted, however, that given the OECD political clout,

it has been able to put international pressure on several Commonwealth

Caribbean countries by labeling them tax havens.

[37] find website e-commerce : impacts and policy challenges.

[38] As available at http://www.crnm.org/ (accessed 17th November

2003)

[39] virtual reality

[40] See www.inlandrevenue.gov.uk/e-commerce/release128_98.htm visited

7/11/2003

[41] Copy the inland revenue website here.

[42] As available at www.oecdobserver.org/news/fullstory.php/aid/416/

E-commerce …: a virtual _reality.htm visited 7/11/2003 interview with

Simon Woodside, Fiscal Affairs at OECD.