Thesis (M. Comm,)--University of the Witwatersrand, Faculty of Commerce, 2001. / Electronic commerce is a new technology, which is growing rapidly and has the ability to create a truly global digital economy. The extraordinary growth of the internet in the last few years has led to the birth of a world without borders, a place where free communication, a competitive market and extensive comparison shopping are a matter of course. This apparent lack of geography in cyberspace has raised complex problems regarding government tax policy. The rapid rise in sales over the internet and the fact that most internet buyers pay no income tax on transactions has ignited a considerable debate over taxes and the internet. The nature of the internet and the globalisation of the world economy mean that developments in e-commerce create legal problems concerning security of transactions and legal jurisdiction of transactions. There is a general concern that e-commerce provides taxpayers with the ability to move transactions outside a country's jurisdiction and thus avoid paying tax in that taxing jurisdiction. The advent of ecommerce has also given dishonest taxpayers the ability to structure their affairs to reduce or avoid paying tax in their jurisdictions. Rules written specifically to address the unique characteristics of electronic commerce are few and must be creatively adapted to the unique needs of e-commerce. As the volume of e-commerce increases, however, so will the number of rules. Many government committees and commissions devoted wholly or partly to make proposals and write the rules for e-commerce, exist throughout the world. In the United States the highest profile commission is the Advisory Commission on Electronic Commerce. This commission has a mandate to recommend far-reaching changes to the taxation of electronic commerce, especially in the areas of sales and value-added tax ('Vat') and cross-border taxation. Research conducted by Austan Goolsbee has shown that applying the conventional tax policy to the internet commerce will reduce the number of buyers on the internet by up to 24 percent. Various countries are currently formulating their respective regulatory policies in an attempt to find solutions to problems posed by e-commerce.