This study analyzes principles for available consumption tax system, and proposes a new cyber-consumption tax policy named as the Consumer Delivered Sales Tax (CDS Tax). The CDS tax has the characteristic of a kind of sales tax, but it is directly delivered by the consumer without the intervention of the supplier in the electronic commerce environment. To design a desirable cyber-tax system, seven evaluation criteria have been laid out: equitable, simple, confident, prevents tax evasion, avoids economic distortion, fairly balances between countries, and does not introduce a new form of taxation. The specifically designed CDS tax, designated as Canonical CDS tax, is defined as follows: “The Canonical CDS tax is imposed by the supplier country’s taxation office consistently to the consumers in both physical- and cyber-space. The tax bill is issued by the merchant’s software to the consumer’s PC at the price billing time, and charged at the time of the consumer’s price payment by transferring the tax amount to the taxation office’s account in the same bank if the bank is authorized to handle tax collection.” This study shows that the Canonical CDS tax system can be implemented using the typical electronical payment systems such as electronic fund transfer, electronic credit card and electronic cash. This study also demonstrates that the Canonical CDS tax system can coexist with the traditional consumption tax systems such as sales tax and value added tax.

Cyber-Consumption Tax; Cyber-Taxation; Electronic Commerce; Electronic Payment System; Internet; Sales Tax