The challenges to taxing e-commerce : a comparative analysis for the Pacific

This paper examines the challenges that electronic commerce poses to the taxing jurisdictions of the Pacific Island countries using Fiji and Tonga as case studies. The study is a comparative analysis between the current impact of tax and e-commerce in the Pacific with New Zealand and Australia as benchmark countries. Empirical evidence was collected through semi-structured interviews with the Inland Revenue tax auditors of Fiji and Tonga. Research findings reveal that the nature of the challenges identified for the developed countries are also applicable to Pacific Islands as developing island states but with varying degrees of complexities. The findings reveal that the two Pacific Island countries need to strengthen their electronic commerce policies and amend current tax laws. This will enable the taxing authority to enable tax practitioners to work within the strong and firm reach of their tax legislations. The paper contributes to the limited literature on accountability in relation to taxing e-commerce in less developed countries such as the Pacific Island nations.