Abstract/Preface

In the past two decades, the landscape of commerce has undergone a profound transformation, driven primarily by the rapid advancement of technology and the proliferation of the internet. E-commerce has emerged as a dominant force in the global economy, reshaping how businesses operate and how consumers engage with products and services. This dissertation, titled “The Impact of Taxation on E-Commerce-Enabled Transactions,” seeks to explore the intricate relationship between taxation and e-commerce, highlighting the challenges and opportunities that arise in this evolving digital marketplace.

As a law student with a keen interest in taxation and economic policy, I have witnessed firsthand the complexities that arise when traditional tax frameworks are applied to digital transactions. The rise of e-commerce not only presents unique challenges for tax authorities but also raises critical questions about fairness, compliance, and revenue generation. This research aims to provide a comprehensive analysis of these issues, drawing on various legal frameworks, economic theories, and empirical data to inform policymakers and stakeholders about best practices in e-commerce taxation.

The motivation behind this dissertation stems from the recognition that effective taxation is essential for fostering a sustainable digital economy. As e-commerce continues to grow at an unprecedented rate—projected to reach over $6 trillion by 2024—it is imperative that governments adapt their tax policies to accommodate this new reality. By examining the impact of existing tax structures on e-commerce transactions, this study aims to contribute valuable insights into how taxation can be leveraged as a tool for promoting fair competition while ensuring adequate revenue generation for public services.

I would like to express my gratitude to my academic advisors and mentors who have guided me throughout this research journey. Their invaluable feedback and encouragement have been instrumental in shaping my understanding of the complexities surrounding e-commerce taxation. Additionally, I extend my appreciation to the numerous professionals in the field who generously shared their insights and experiences during interviews and surveys.

Lastly, I dedicate this dissertation to all those who strive for innovation in the digital economy while navigating the intricate world of taxation. It is my hope that this work will serve as a resource for future research and policy development, ultimately contributing to a more equitable and efficient framework for taxing e-commerce transactions.

Overview of E-Commerce: Definition and Growth of E-Commerce Globally and Regionally

E-commerce, or electronic commerce, refers to the buying and selling of goods and services over the internet. It encompasses a wide range of activities, including retail sales, online auctions, and business-to-business transactions. The rise of e-commerce has fundamentally altered how businesses operate and consumers shop, creating a global marketplace that transcends traditional geographical boundaries.[1]

Definition and Scope

E-commerce can be categorized into several models: Business-to-Consumer (B2C), Business-to-Business (B2B), Consumer-to-Consumer (C2C), and Consumer-to-Business (C2B). Each model plays a distinct role in the digital economy. B2C transactions, for instance, involve businesses selling directly to consumers through online platforms like Amazon and Alibaba. B2B transactions are characterized by wholesale suppliers selling to retailers or other businesses. C2C platforms, such as eBay and Etsy, enable consumers to sell directly to one another.[2]

Global Growth Trends

The growth of e-commerce has been exponential. As of 2023, global e-commerce sales are projected to reach approximately $6.3 trillion, with expectations to grow to $8.1 trillion by 2024. This growth is driven by increasing internet penetration, mobile device usage, and changing consumer behaviours favouring online shopping. The number of digital buyers worldwide has surged to 2.64 billion, reflecting a significant penetration rate of 19% in 2022, which is expected to rise to 25% by 2027.[3]

China leads the world in e-commerce sales, accounting for nearly 50% of global online retail sales. In 2023, China’s e-commerce market was valued at approximately $2.8 trillion, significantly outpacing the United States, which is projected to reach about $1.137 trillion in online sales by the end of the same year. This disparity underscores the rapid adoption of e-commerce in emerging markets compared to more established economies.[4]

Regional Insights

Regionally, North America and Asia-Pacific are at the forefront of e-commerce growth. In North America, particularly the United States, e-commerce penetration has doubled from 17% in 2020 to 35% in 2023. Approximately 70% of Americans engage in online shopping regularly, highlighting a cultural shift towards digital consumption.[5]

Conversely, the Asia-Pacific region is experiencing even more rapid growth rates. Projections indicate that its e-commerce market will expand from $9.29 trillion in 2023 to approximately $42.82 trillion by 2034. Countries like India are also emerging as significant players in this space due to increasing smartphone usage and improved logistics networks.[6]

[1]Karine, H.A.J.I., 2021. E-commerce development in rural and remote areas of BRICS countries. Journal of Integrative Agriculture, 20(4), pp.979-997.

[2] Goyal, S., Sergi, B.S. and Esposito, M., 2019. Literature review of emerging trends and future directions of e-commerce in global business landscape. World Review of Entrepreneurship, Management and Sustainable Development, 15(1-2), pp.226-255.

[3]Charle Agency. (n.d.). E-commerce Statistics. [online] Available at: https: //www.charleagency.com/articles /ecommerce-statistics/ [Accessed 14 Feb. 2025].

[4] Statista. (2024). E-commerce in China. [Online] Available at: https://www.statista.com/statistics/278555/china-online-shopping-gross-merchandise-volume/ [Accessed February 15, 2025].

[5] Asian Development Bank (ADB). (2023). E-commerce Evolution in Asia and the Pacific: Opportunities and Challenges. Available from: https://www.adb.org/sites/default/files/publication/922086/e-commerce-evolution-asia-pacific-opportunities-challenges.pdf

[6] ResearchAndMarkets.com (2024) Asia-Pacific e-Commerce Market Report 2023-2027: Amid Growing Market Value and Rising Competition, Firms are Seeking to Expand their Presence in More E-Commerce Verticals, GlobeNewswire. Available at: https://www.globenewswire.com/news-release/2024/03/04/2839476/0/en/Asia-Pacific-e-Commerce-Market-Report-2023-2027-Amid-Growing-Market-Value-and-Rising-Competition-Firms-are-Seeking-to-Expand-their-Presence-in-More-ECommerce-Verticals.html (Accessed: 14 February 2025).