Taxation issues for an international e-commerce site

Question

The local manufacturer of work and gardening gloves has been enjoy moderate success in its local markets with physical sales team. The president is convinced that the e-commerce site could adequately increase sales, specially on the international market.

Elucidate the taxation issues the company should consider for an international e-commerce site.

Answer 1

The current taxation structure is such, that it depends on bottlenecks in the system, where it can target few people to act as its agents and collect the taxes on the government’s behalf. And later the government could collect from these agents. 

Now, the problem that arises with an ecommerce is that these bottlenecks are vanishing, and the number of people involved has vastly increased thus making individual accounting virtually impossible.  

Another problem that arises is that of the jurisdiction, as the cyberspace does not understand any boundaries. Most of indirect taxes like the Value added taxes will also become obsolete soon enough, making the burden fall on one entity in the whole chain. Direct tax collection would also take a hit, as ecommerce allows businesses the process of disintermediation.