Article, Possible reasons for the EU not to address competitiveness concerns by instituting a moratorium on taxation

Global E-commerce Taxation

Benjamin M Musau, Lawyer, Nairobi, Kenya

This article discusses the possible reasons for the EU not to address competitiveness concerns by instituting a moratorium on taxation.
The reasons for EU’s failure to address competitiveness concerns by instituting a moratorium on taxation are:
 

1. A moratorium does not tally with the OECD taxation framework conditions and the institution of such a moratorium would undermine the process of OECD.
2. A moratorium on taxation would be quite challenging to reverse, based on previous experiences, leading to uncertainty while it is necessary to provide clear legal laws, rules and regulation that are certain and predictable for the growth and development of digital commerce.
3. The EU Directive is the first step in getting an internatial solution to e-commerce legal challenges while the EU member states had the obligation of reviewing the EU Directive in 2006 to reflect a realistic appraisal of OECD’s ongoing work.
4. It is not logically conceivable that a moratorium would necessarily increase the commitment of business to developing more technical tax collection systems, methods or mechanisms.
5. Active discrimination would arise as a direct result of the moratorium – for example, music on traditional “physical” media such as CDs would carry a penalty of tax as compared with music that is sold digitally.

 
References:
 

1. http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/e-services/article_1610_en.htm#a9.  Retrieved from the Internet on May 18, 2011.

 
 
Benjamin M Musau
 
May 18, 2011
ndw�ni�?D�B as follows:
 

• foreign PEPs will always be considered to be higher risk;
• reasonable measures will be required to be taken to determining whether a customer is a domestic PEP; and
• enhanced Customer Due Diligence if the domestic PEP is considered to be a higher risk.

A case of “there are PEPs, and then there are PEPs”.  In reality, there has always been some grading of PEPs within institutions to allocate resources to genuinely high risk PEPs.  These proposals seem to go some way in confirming this.  The family and close associates requirement will also be tightened up.
References:

1. http://www.fincen.gov/news_room/testimony/pdf/20100204.pdf
2. http://www.senat.fr/ue/pac/E2734.html
3. http://allafrica.com/stories/200108080222.html
4. http://www.worldcompliance.com/global-pep-list.html
5. http://www.fatf-gafi.org/glossary/0,3414,en_32250379_32236930_35433764_1_1_1_1,00.html
6. http://www.kyc360.com/hot_topic/show/159?set=1

28^th February, 2011

Dr. Benjamin Musau

I am a Kenyan Advocate and the Managing Partner of B M Musau & Co., Advocates, a position I have held since 1999. My work encompasses regulatory reforms, reduction of administrative burdens, the structure of business entities, joint ventures, acquisitions, banking, foreign investment and other general corporate areas