The Political Feasibility of a Global E-Commerce Tax

56 Pages Posted: 2 Jun 2013

See all articles by Rifat Azam

Rifat Azam

Harry Radzyner School of Law, Interdisciplinary Center Herzliya

Date Written: 2013


In its strongest statement yet on progressive tax reform, the UN has recently called on countries to introduce a global carbon tax and financial transaction tax (FTT). In my recent article entitled Global Taxation of Cross Border E-commerce Income (31 Virginia Tax Review 639 (Spring 2012)), I proposed to impose a global e-commerce tax on cross border e-commerce income by a new supranational institution, The Global Tax Fund, to be established by countries through international treaty. According to my proposal, the global e-commerce tax revenues shall be spent to fund global public goods. I argued normatively that the proposed regime achieves legitimate, certain, efficient and fair taxation on cross border e-commerce income. In addition, it finances very important and growing need of supplying global public goods. I concluded that Global E-commerce Tax would be a desirable and plausible resolution of linked problems on both the income tax and the expenditure side of government functions.

In this article I examine the political feasibility of a global e-commerce tax (GET) to fund global public goods. I argue that it is indeed a project of formidable dimensions but it is nonetheless a viable one. I open the political analysis by overcoming sovereignty concerns and argue that sovereignty has changed and it means in the 21st century equal membership in setting international rules and therefore new sovereignty could accept GET as long as countries have good interests and values for such international cooperation. I discuss these interests and values within the theoretical framework of international relations and argue that given the failure in the taxation of cross border e-commerce income, real politicians could accept GET as a compromise to achieve efficient and fair taxation on cross border e-commerce income without benefiting one country on behalf of the other but rather benefiting all similarly. I further argue that liberal politicians could clearly accept GET as a regime which fulfills liberal values of human welfare, fairness and development.

I deeply discuss the global interest and value of funding global public goods. in my opinion, each country and country, from real and liberal point of view, have a good interest and value in financing global public goods. This finance benefit each country as a consumer of global public goods and it could reduce national spending on global public goods. In addition, countries could share and advance the value of financing global public goods especially as long as fairness and accountability are kept in such finance regime within the Global Tax Fund.

In support of my theoretical and analytical arguments for the political feasibility of a global e-commerce tax to fund global public goods, I rely on a set of empirical case studies: First, recent proposals of the UN, the European Telecommunication Network Operators Association (ETNO) and the International Telecommunication Union (ITU), the G20 countries and the European Union (EU) to impose global taxes. Second, the growing trend towards cooperation on global tax issues, as exemplified by the struggle against harmful tax competition, and the growing role of the OECD in setting international tax policy and norms. Third, the experience of existing international economic institutions such as the WTO and the IMF and their supranational role; Fourth, the recent development of the Streamlined Sales and Use Tax Agreement in the United States in which states agreed to harmonize their sales tax laws to cope with e-commerce tax issues.

In conclusion, this article innovates in its interdisciplinary mix of tax law, international law and international relations. It gives theoretical, analytical and empirical support for the political feasibility of revolutionary international tax regime. I end this article by challenging political leaders to make the political feasibility a political reality.

Keywords: taxation, international taxation, global taxation, global public goods, global finance, international cooperation, international institutions, globalization,

JEL Classification: A10, E60, E61, E62, F02, F30, H20, H40, K34

Suggested Citation

Azam, Rifat, The Political Feasibility of a Global E-Commerce Tax (2013). University of Memphis Law Review, Vol. 43, No. 3, p. 711 (2013), Available at SSRN:

Rifat Azam (Contact Author)

Harry Radzyner School of Law, Interdisciplinary Center Herzliya ( email )

P.O. Box 167
Herzliya, 46150
972-9-9527948 (Phone)


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