CYBERTAX

Internet, the fastest growing communications medium or consumer electr onic technology, doubles its size every six months. Within a few years the number of citizens in Cyberspace will outnumber all but the large st nations. The borderless world of the Internet extends its reach to all corners of the world. Best of all, it is almost free. Hardware cos ts aside, once on the Internet a user can surf anywhere for the price of a local phone call. But what about all the foregone tax revenue tha t electronic commerce could facilitate? Although Internet commerce is in its earliest stages, its rapid growth is anticipated. Some estimate that in 30 years time, consumer activity online could represent more than 30% of total consumer activity. This leads to the erosion of nati onal tax bases. In this paper we show that, as a measure of last resor t, the bit tax can be implemented. Although the exact implementation o f such a tax is not yet clear, the general idea of a tax on informatio n from the point of view of an eroding tax base and the changing socie ty is certainly worth considering. Furthermore, the tax revenues could be directed towards improving access to the Internet, educating indiv iduals to become acquainted with the Internet and providing additional needed bandwidth. (C) 1998 Elsevier Science Ltd. All rights reserved.