Fair Taxation in the Digital Economy

Abstract

We are living in a technology-driven era in which new developments and innovations are happening at a rate we have never seen before. As technology merges with the economy, we have witnessed the rise of the digital economy, which is growing day by day. The international community—and developing economies particularly—can greatly benefit from these innovations. Policy makers, however, must ensure they are harnessed in a way that ensures the benefits are shared as equitably as possible. With any new development come new challenges. In particular, the spread of the digital economy creates challenges for international taxation as well as domestic tax revenue mobilization. As taxes are the main sources of revenue for the government to fund its various public services and projects, tax authorities must learn to adjust their capability to catch up with the fast change of digital economy activities. However, capacity in governance remains weak in many developing countries in Asia and the Pacific.