Online tax to affect consumers: ATO

E-commerce will not pose any significant risks to taxation revenues in the short term, the Australia Taxation Office has concluded.

The initial risks, if any, are more likely to affect business to consumer transactions, Stuart Hamilton, acting assistant deputy commissioner - central said.

According to Hamilton, the risks are related to the non-collection of tax.

"There is a not a huge tax risk for business-to-business electronic commerce," Hamilton said.

Currently, the majority of e-commerce transactions occur in the business to consumer market, he said.

"Once we move to digital goods and services, we need to look at how we can neutrally tax those transactions appropriately."

Hamilton said it is important to ensure Australian businesses aren't "undercut" by offshore businesses.

The ATO is working with local businesses and international organisations to develop global standards.

"Because e-commerce is global . . . it requires global cooperation.

"Global systems require global solutions," he said.

While the ATO is working to implement e-commerce standards and systems internally and within Australia, international involvement in the in e-commerce taxation issues is more complex, he said.

"The international level of cooperation is realistically five years out or possibly more . . .but it will happen," Hamilton said, adding that this is far quicker than development in the physical world.

"Five years would be significantly faster than the physical world . . .It would be quite an accomplishment," he said.

Meanwhile, Hamilton said Australia and the ATO are "at the forefront" of Internet tax development.

"There are probably seven or eight [countries] up at the same level, Australia is clearly out there with them," Hamilton said.

The ATO is in the process of setting up an Australian consultative forum to discuss e-commerce taxation issues with the government and business. The group is expected to meet for the first time early next year.

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