E-Tax: "Don't Make Law you can't Enforce"

12.00.00am GMT Wed 13th Dec 2000

Diana Wallis MEP will be asking the European Parliament to back her call for tax on goods delivered over the Internet to be scrapped across the EU.

The European Commission has come forward with proposals to impose VAT on digitally delivered goods - like music and software - from non-EU companies, in an attempt to try to close the competitive gap that has arisen between EU and non-EU businesses. But the European Liberal Democrats want the tax scrapped instead.

"A tax on e-commerce does not encourage growth of trade over the Internet," said Diana Wallis MEP. "There is a competition gap between EU firms and US companies, but rather than levy a tax on businesses importing to Europe, why not scrap the EU tax altogether?"

In her speech to the European Parliament tonight, Diana Wallis will also draw attention to the fact that the Commission's proposals are too complex and would be difficult to implement and enforce.

"I was always told that one of the first rules or principles as a legislator is do not make law that you cannot enforce," Diana will say. "It cannot be enough to rely on the goodwill of enterprises outside our reach, the good guys will comply and the bad ones will still be bad - and consumers may well use them in the search for a better deal!

"This proposal might on the face of it be about the taxation of non-EU business, but what it is actually about is how we encourage and nurture Europe's e-economy. It is a very fragile flower."