The Australian Taxation Office's new strategy to get businesses to file their tax returns online may be the precursor to establishing a method for taxing the Internet economy.
However, the ATO has yet to establish a concrete formula on how to successfully regulate e-commerce.
The online tax strategy includes the combination of the new Australian Business Number (ABN), electronic authentication certificates and digital keys, and was primarily established to make the most of technology upon the introduction of the GST next year, according to ATO commissioner Michael Carmody.
"E-commerce is set to change the formulation and definition of taxation law in Australia. It will produce a shift in taxing to meet the changing needs of business," Carmody said.
In an effort to get more companies to conduct their business with the ATO online, the tax office has developed an Internet-based Electronic Commerce Interface (ECI), which supports electronic service delivery for businesses.
To identify users, the ATO plans to issue its business clients with a digital key and an electronic certificate.
From February, a trial version of the interface, which the ATO hopes to extend to individual transactions, will be available before it is put into full operation from July. Businesses will be able to use the interface to lodge their monthly or quarterly Business Activity Statement (BAS), the new form businesses will use to report their tax obligations.
The ATO will also provide its own e-commerce software free to its business clients. The new software will enable clients to retrieve their electronic BAS from the ATO, enter the required information and transmit the completed BAS back to the ATO.
Although the system would initially be used for business-to-ATO transactions, Carmody said it was being examined as a "solid structure" for business-to-business and business-to-consumer e-commerce in the future.
Carmody said the ATO would continue to explore methods to establish a suitable tax system for e-commerce, and said a preliminary release of Australia's e-commerce report card revealed current levels of e-commerce were having little impact on present taxation revenues.