Challenges Related to Determining Taxes on Electronic Commerce A Field Study on the Executive Unit for Taxes on large Taxpayers

Abstract

The study aimed to identify the challenges related to determining the tax on e-commerce within the Executive Unit for Taxes on Large Taxpayers, focusing on four main dimensions: tax challenges associated with the nature of e-commerce, legislative and legal challenges, infrastructure-related challenges, and challenges concerning the availability of qualified tax personnel. These dimensions were discussed in terms of their impact on determining the appropriate tax for e-commerce. The study concentrated on the specific challenges of determining e-commerce taxes in Yemen, employing a descriptive-analytical approach and utilizing a questionnaire for data collection. The questionnaire was distributed to a sample of 170 employees from the Executive Unit for Taxes on Large Taxpayers, most of whom held technical positions (inspector, auditor, head department).

The findings revealed that accounting challenges—related to the nature of e-commerce, legislative and legal issues, infrastructure, and the availability of qualified tax personnel—affect the determination of e-commerce taxation. The study found a positive correlation between these various accounting challenges and the process of determining e-commerce taxes. Additionally, it highlighted the need for a networked connection between the Tax Authority and various entities involved in e-commerce, as well as the necessity to develop tax legislation and align tax collection mechanisms with the advancements in e-commerce, given that the current tax legislation does not keep pace with these developments. The study recommended establishing an integrated system linking the tax administration with entities concerned with e-commerce to facilitate information exchange and accurately account for e-commerce transactions. It also suggested drafting and adopting new legislation or amending existing laws to address the specific nature of e-commerce transactions, thereby closing legal gaps that lead to revenue loss. Furthermore, the study emphasized the importance of training tax personnel in tracking and accounting for e-commerce transactions.