Tax and Technology

1. Introduction

The First Industrial Revolution used water and stem power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. Now a Fourth Industrial Revolution is building on the Third, the digital revolution. It is characterised by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.

We are currently living in the era of disruptive technologies that distort the lines between the physical, digital, and biological spheres. The expansive development of the digital economy has become one of governments’ targets of tax revenues, especially in the field of value added tax (hereinafter VAT) or goods and services tax (hereinafter GST). From the use of floppy disks in the 1970s into the 1990s for data storage, backup, and data transfers between computers to the use of read-writeable CDs, DVDs, and finally USB flash drives, these older physical forms of data storages and transfers have now been mostly replaced by cloud computing. The term cloud computing simply means the delivery of computing resources as a utility service via the ...