Oireachtas

E-commerce expected to be worth £400m by 2001

Electronic commerce in Ireland is expected to be worth £400 million by 2001, according to the Minister for Finance, Mr McCreevy…

By MICHAEL O'REGAN and MARIE O'HALLORAN
Fri Jun 25 1999 - 01:00

Electronic commerce in Ireland is expected to be worth £400 million by 2001, according to the Minister for Finance, Mr McCreevy.

This marks a massive increase on its 1997 value of less than £10 million. Globally, the Minister said, conducting business through the Internet was worth between $8 billion and $40 billion annually.

"Future projections are equally wide-ranging, with probably the most conservative estimates coming from the US government which stated that it would be worth $365 billion by 2002."

He told Mr Jimmy Deenihan (FG, Kerry North) that current taxation rules would be "robust" enough to cope with any increase in e-commerce transactions. Mr Deenihan had asked what proposals the Minister had to ensure the relevant tax was paid by companies conducting business through e-commerce.

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Mr McCreevy said the principles underlying the Government's approach were exactly the same as for traditional business and in line with EU and OECD norms. "In other words, the current tax rules and systems are applied as far as possible to e-commerce and where difficulties are encountered with this approach, some fine-tuning may be necessary."

He added, however, that there was a possibility there might be some problems with collecting taxes from outside the EU.

"At the moment much e-commerce transactions relate to the on-line ordering and physical delivery of goods. If there is a significant increase in the amount of goods physically delivered, this could cause some distortion of trade between EU and non-EU traders and this may require further examination."

Mr Deenihan asked if the Minister would review the practice of not imposing customs duties on electronic transactions. He also asked if he would consider a clearance certificate for people making financial transactions by ecommerce and setting up a regulator to control the practice of ecommerce.

Mr McCreevy said he and his "EU partners" believed the current rules were adequate, but "since this area is developing so quickly we may need to revisit the matter in the near future".

That would be done at EU level. "It is not a matter which the Irish authorities, or for that matter other authorities or member states, would be able to tackle alone."