Cyber Banking

The use of electronic cash as a means of transacting internet business may prove to be an acceptable alternative to credit card payments. It is reported that the withdrawal of major players from the attempt to develop e-cash is a significant setback. "?The use of digital or electronic cash in e-commerce transactions could lead to difficulties for Revenue auditors. Revenue auditors have traditionally had to grapple with the lack of controls associated with the cash economy. The increasing sophistication of business transactions and the development of a variety of payment methods have meant that cash payments have become a diminishing feature of business transactions."

Look here the power has been restricted under the section 94 of C of Cr.P.C. (Act V of 1898) for getting access to banking records, "?Provided that no such officer shall issue any order requiring the production of any document or other thing which is in the custody of bank or banker as defined in Banker' Evidence Act, 1891(XVII of 1891), and relates or might disclose any information which relates to the bank account of any person except?"

The first and lesser problem relating to the regulation of Internet commerce for tax purposes is the uncertainty of whether current laws will even apply to financial transfers on the Internet. By requiring very specific documentation of every transaction the government can attempt to extend the regulations that apply to paper based banking into "cyber banking". Nevertheless, it appears that this legislation will primarily be targeted at technology such as automatic teller machines and wire transfers, but will not contemplate newer banking applications such as the Internet. For example, the requirements that consumers receive receipts and periodic statements reflecting electronic transfers of money do not make sense when applied to stored-value cards that operate independently of a bank account. Stored value cards will likely replace cash to a significant degree as we move towards an increasingly paperless society.

The developments in electronic payment systems have the potential to create "electronic money." Electronic money is a broad term, and just as electronic money systems differ in their technical features, they also differ in the extent to which they create issues for tax returns. Depending on the type of system used, electronic money can be either an advantage or a disadvantage for collection of taxation.

The electronic money poses a tax evasion potential similar to that created by paper money. This raises the issue of whether the evasion potential is manageable and what must be done to manage it. It is possible that the techniques that have been developed over time to combat evasion using paper money can be adapted and expanded to combat evasion through electronic money.

The Electronic money creates opportunities to deposit unreported income in a bank or other financial institution. As a result of electronic money's advantage in transmitting large amounts of money with relative ease, combined with the continued use of cash, the problem of an underground, unaccounted for economy is likely to be exacerbated.

Electronic money and the Internet substantially increase the ease and safety with which bank accounts can be opened abroad, letterbox companies and trust accounts can be established abroad, and funds transferred anonymously. Such accounts are, of course, subject to the reporting requirements for foreign financial accounts.

The writer is an advocate of High Court and practicing immigration and corporate laws in Pakistan since September 2001. He is a self employed and pioneer in research on electronic commerce taxation in Pakistan. His articles were published widely in the critical areas of cyber crimes, electronic commerce, e-taxation and various other topics. He wrote LL.M thesis on titled "Legislation of electronic commerce taxation in Pakistan" in which he provided comprehensive legal proposals for statutory reconstruction of tax laws for purpose of imposition of taxation on e-business in Pakistan. Currently he is conducting is research on topic 'Electronic commerce taxation: emerging legal issues of digital evidence'.

Author can be contacted by adil.waseem@lawyer.com.

---

Start doing online business using B2B Portals in Six Steps

I registered with a B2B site but what's next?This is... Read More

Complementary-Relational Linking and How It Could Save Your Internet Business

The concept of linking is that sites with common interests... Read More

Intranet Project ? RAD or Waterfall?

Building BridgesI have often used the analogy of building a... Read More

The House Of Print.Com

Publishing has always been a difficult business to promote successfully,... Read More

How Do You Make Money Online?

If you learn how other people make money online, I... Read More

The Plain Man?s Guide to Making Money Online

I'm a plain man who uses plain thinking in devising... Read More

Short Story: The Benefits of Shopping Online

Maria's new lifestyle: Short story about the benefits shopping on... Read More

Delivering Information Products Through Paypal Automatically

Paypal is one of the wonders of the web. Never... Read More

Evaluating Vendors of Ecommerce Fulfillment Services

Once your website has secured an order, you have to... Read More

Choosing an Ecommerce Shopping Cart

Choosing an online shopping cart is a big decision. Unlike... Read More

Getting Started in ECommerce ? Part Two

In Part One we talked a little bit about what... Read More

Intranet Portals ? Collaboration through Team Rooms

Knowledge Management for beginnersKnowledge Management (KM) can be defined simply... Read More

The Top 10 E-Commerce Ways to Follow up with Clients - Part 2

Did you know that 80% of all sales are made... Read More

Pitfalls of Doing Big International Brokerage Business Online

Nothing has helped international brokerage business more than the internet:... Read More

Paypal Primer

To conduct business on the Internet, whether informal, one-time only... Read More

Intranet Project Names - Some Ideas

"What's in a name? That which we call a rose... Read More

Intranet - The Benefits Realisation Plan

The Millennium ExperienceA successful project is one that delivers on-spec... Read More

Is ECommerce Right for Our Business?

If your business features products or services for sale, undoubtedly... Read More

Selling From Your Website

Greetings!Friends and relitives ask us all the time " How... Read More

10 Second Internet Person, sound familiar?

Some people do not understand the Internet idea of online... Read More

Online Lead Generation: Can it Work for My Business?

Business-to-business service providers have a wide range of tactics they... Read More

Online Customer Service - The Cornerstone of a Successful Online Business

Online customer service is still one of the most frequently... Read More

How Merchant Accounts Can Save You Money

We all know that accepting credit cards is the key... Read More

Managing Project Risks and Issues

Inherent (or Business) RiskInherent Risk is the risk that exists... Read More

Effective Management Of Your Customer Services

With a third party merchant account you will have a... Read More

Top 5 Dot Com Myths Debunked

Most people who get into business know what's involved. They... Read More

PayPal Powered

Three years ago I was doing some work for a... Read More

Ten Reasons Why Online Surveys Are The Future of Marketing

Customers are tough cookies. They're extremely media aware and increasingly... Read More

Direct Marketing isn?t all Brute Force

There are so many metrics surrounding direct marketing. So many... Read More

How To Turn Any Product You Sell In To Residual Income

The concept of this is for you to offer a... Read More

Accept Credit Cards Online Without a Merchant Account

There are two major ways to accept credit cards on... Read More

Does Your Shopping Cart Have a Squeaky Wheel?

Have you ever gone grocery shopping just before a holiday?... Read More

How Measuring Key Performance Indicators Can Improve E-Commerce Strategy - Part One

The problem with most e-commerce marketing strategy today is that... Read More