E-Taxation

UNIT- 2
 Modern Principles of Taxation
The analysis of classical theories allows the formulation of
principles that represent the qualities and tendencies of the
modern taxation system.
The modern principles of taxation are:
1. The rational combination of direct and indirect taxes,
which implies the utilization of various types of taxes, taking
into consideration both the wealth and the income of the
taxpayer. In periods of economic crisis it is better to have many
sources of budget revenue with a relatively low rate and a large
taxation basis then to have 1-2 types of income with high
deduction rates.
1. प्रत्यक्ष और अप्रत्यक्ष करों का तर्क संगत संयोजन, जिसका अर्थ है करदाता की संपत्ति और आय
दोनों को ध्यान में रखते हुए विभिन्न प्रकार के करों का उपयोग। आर्थिक संकट की अवधि में अपेक्षाकृ त
कम दर और बड़े कराधान आधार के साथ बजट राजस्व के कई स्रोत होना बेहतर होता है, फिर उच्च
The universalization of taxation which implies equivalent
efficiency requirements to all payers and an equivalent
approach to the deduction of the tax amount irrespective of
the income source, type of activity, or economic sector. It is
not acceptable to introduce additional taxes, increased and
differentiated rates, or tax allowances for different types of
ownership, organizational or juridical structure of the entity,
citizenship of natural persons or other factors. In addition,
taxes should not be established or applied on basis of political,
economic, and ethnic factors, or other criteria of this type.
2. कराधान का सार्वभौमिकरण जिसका अर्थ है सभी भुगतानकर्ताओं के लिए समान दक्षता
आवश्यकताओं और आय स्रोत, गतिविधि के प्रकार, या आर्थिक क्षेत्र के बावजूद कर राशि की कटौती
के लिए एक समान दृष्टिकोण। अतिरिक्त करों, बढ़ी हुई और विभेदित दरों, या विभिन्न प्रकार के
स्वामित्व के लिए कर भत्ते, संस्था की संगठनात्मक या न्यायिक संरचना, प्राकृ तिक व्यक्तियों की
नागरिकता या अन्य कारकों को लागू करना स्वीकार्य नहीं है। इसके अलावा, राजनीतिक, आर्थिक और
जातीय कारकों, या इस प्रकार के अन्य मानदंडों के आधार पर करों को स्थापित या लागू नहीं किया
जाना चाहिए।
One-time taxation implies that one object can only be taxed
once through one tax type for a specific period of time indicated
in the law.
3. एकमुश्त कराधान का तात्पर्य है कि एक वस्तु पर कानून में निर्दिष्ट समय की एक विशिष्ट अवधि के लिए
एक कर प्रकार के माध्यम से के वल एक बार कर लगाया जा सकता है।

The scientific approach for the determination of the exact

tax rate, which implies setting the deduction rate at a level that
would allow the subject to have an income necessary for normal
development. The magnitude of the tax burden should allow the
normal functioning of the taxpayer after paying the tax amount.
It is not acceptable to set the tax rates on basis of short-term
interests of insuring state revenues and to the detriment of
economic development or to the interests of the taxpayer.
4. सटीक कर दर के निर्धारण के लिए वैज्ञानिक दृष्टिकोण, जिसका अर्थ है कि कटौती दर को उस स्तर
पर स्थापित करना जो विषय को सामान्य विकास के लिए आवश्यक आय की अनुमति देगा। कर के बोझ
की भयावहता को अनुमति देनी चाहिए
5- Stability, or the endurance of taxation for a long period of
time and the simplicity of deducting the payment. Tax rates
should be determined by law and should not be revised
frequently.
6- Differentiation of tax rates in accordance to the level of
income, which should not develop into an inhibitive
progression (i.e. a significant increase in tax rates), nor
should it be transformed into an individualization of rates,
which contradicts the basic principles of the market.
7- The application of a tax allowances system, which would
lead to an actual stimulation of investments into
entrepreneurship activities and would, at the same time,
comply with the principle of social justice, including the
insurance of a minimum living standard of the citizens.
Allowances should not be established for certain payers only–
they should be the same for everybody.
Adam Smith
The principles of good taxation were formulated many years ago. In The
Wealth of Nations (1776), Adam Smith argued that taxation should
follow the four principles of
fairness,
certainty,
convenience and
efficiency.
Fairness, in that taxation, should be compatible with taxpayers’
conditions, including their ability to pay in line with personal and
family needs.
Certainty should mean that taxpayers are clearly informed about why
and how taxes are levied.
Convenience relates to the ease of compliance for the taxpayers: how
simple is the process for collecting or paying taxes?
EFFICIENCY touches on the collection of taxes: basically put, the
administration of tax collection should not negatively affect the
allocation and use of resources in the economy, and certainly shouldn’t
The sound basis of good taxation today
Adam Smith’s principles of good taxation form a sound basis
for taxation today, however, they’re not always followed.
Sometimes tax systems hit certain categories of taxpayers or
kinds of consumption while leaving others relatively
untouched. Sometimes tax systems lack transparency,
imposing charges on some goods (eg, fuel excise) without
any explicit indication on our bills.
Sometimes taxpayers are burdened with administrative
tasks, for example filing yearly tax returns online. Sometimes
the tax administration does not, or cannot, apply regulations
or prosecute those who evade taxes in a cost-effective
manner.
 Taxation and the economy
How can governments levy taxes while minimizing negative effects on the economy? Generally,
taxes (on income, on production, or on the consumption of goods) have distortionary effects: they
alter the decisions that individuals and businesses would make if the taxes were not in place.
 Excises
For example, excises (taxes that are levied on the production of goods) often cause producers to
increase the prices of goods, passing the burden of taxation on to consumers. When prices go up,
there’s less demand, so businesses earn less income and consumers enjoy less consumption.
 Personal income tax
In addition, personal income tax reduces consumer purchasing power: consumers purchase fewer
goods than they would do without the income tax, generally cutting luxury and unnecessary items
first, and thereby hitting some industries more strongly than others.
 Economic development and growth
Taxation can also have important effects on economic development and growth. When international
financial markets are liberalized, for example, capital tends to flock towards countries where tax
regimes are more advantageous.
 When personal income tax is relatively high, individuals may prefer spending their time on
recreational activities rather than on additional work. When taxation on savings (including taxation
on financial rents and on real estate) is relatively high, individuals may prefer consuming their
income today rather than putting part of it aside for the future.
 Overall, the effects of decisions that individuals and businesses make may result in less money
being available for investments and less effort to undertake business activities.
E-Commerce Business Challenges
and Solutions
 Leaders across the globe face several eCommerce challenges while adapting to the digital
commerce business. The ten most common eCommerce challenges and solutions when
building a successful eCommerce platform are here.

 1. Customers’ Exploding Expectations
 Retailers worldwide are continuously trying to build their reputation and a sharp brand image
with the promise of a great experience. It is challenging to match customer expectations in an
era where experience matters the most, and tech giants like Amazon take the online buying
process to the proverbial ‘next level’ with anticipatory shipping methods. Competing with
these giants and matching the ever-evolving customer demands is a huge challenge for
retailers today. 86% of buyers are likely to give extra money for a better experience, with a
more significant 89% starting their own business and turning into competitors due to a poor
experience.
 Solution
 To meet customer expectations for a user experience, brands should start analyzing their
eCommerce trends and focus on using this data to develop personalized customer experiences
. The customers must feel acknowledged and valued right from the moment they start using
your service. Send them notification alerts or product updates to facilitate this customer
2. Agility Challenge

We can define Agility as the capability of a business to introduce
advancements, develop and deploy digital content, and respond to
seasonal changes rapidly. Agility drives immediate digital
fulfillment, and it is identified as one of the most critical initiatives
in E-Commerce businesses. Agile transformation is at the heart of
the digital business, and scaling is essential for making it successful.
Many companies find it difficult to move or change quickly to adapt
to customers’ needs. This is because they cannot integrate new
technologies efficiently with their existing system, and, as a result,
penetration into the market gets more complicated.
Solution
Being agile in the E-Commerce approach helps businesses deliver an
enhanced shopping experience. To be agile, E-Commerce businesses
must assimilate quick changes across all platforms and create
personalized collections that inspire consumers. They should keep
putting out fresh content.
3. Being Consistent
Consistency is an essential element when curetting a
successful omnichannel strategy. Customers use numerous
platforms to search for items before deciding, requiring
businesses to provide smooth buying touch points through
every product or service. However, analyzing and
understanding customer interactions across all touch points
and using them to build a consistent and smooth
customer experience is one of the significant E-Commerce
challenges for retailers.
Solution
Brands can optimize their online platforms to deliver
complete consistency between search options, various
shopping pages, and shipping details. This will help them
make the shopping experience seamless and satisfactory for
the shoppers. They should also work on product quality,
4. Data Security
Building strong ecommerce security is critical to your company’s success.
The increased use of E-Commerce raises security concerns, and this is one
of the most pressing eCommerce issues. Hackers and fraudsters threaten
to attack the host server, steal confidential data, and introduce viruses.
Breach of credit and debit card information has become commonplace,
and such lapses directly impact a consumer’s trust. Phishing is another
threat hackers pose as a company and request sensitive information from
their customers. Several users are increasingly concerned about the ability
of E-Commerce websites to protect their identity and transaction details
effectively.
Solution
To maintain the brand’s reputation and attract repeat customers, every
business operating in the digital space must prioritize security. Switching
to HTTPS protocols, using credible third-party payment processing
systems, and obtaining Payment Card Industry Data Security Standard
(PCI DSS) accreditation are steps to protect the business’s data and its
customers. Firewall software and plugins that protect against SQL
injections and cross-site scripting help avoid suspicious networks while
allowing reliable traffic to the website.
 5. Technology Partnerships
 Technological partnerships are becoming popular in the eCommerce
domain. Much is at stake when businesses join hands with a company to
bring their idea to life. The end product can succeed by focusing on the
tech or processes and giving precedence to trust, transparency, and
communication between the partners.
 There are obvious risks to this approach. Many businesses gravitate to
choosing a partner based on costs without first setting the right
expectations or understanding their work scope. These gaps lead to a
disastrous collaboration and end product. But access to a vast pool of talent
and technology, outsourcing can prove highly beneficial if done right.
 Solution
 With platforms such as Clutch that offer detailed client reviews of
software development companies across the globe, it is relatively simpler
to find the right outsourcing partner for an eCommerce business. Business
leaders should thoroughly research the company’s past work and expertise
to determine if they are an excellent collaborative fit. Discussing project
expectations, understanding their past work experience, and ensuring that
the eCommerce web development company is aligned to offering modern-
day solutions such as agility and digital transformation help make the right
 6. Customer Retention
 Even some prominent players in the eCommerce segment struggle to retain
their customer base. Customer-centric eCommerce challenges can be
attributed to many factors such as the evolving expectation of the consumer,
similar options, the failure to create a pleasant shopping experience, and
sometimes the offers and discounts being more substantial on the other
platforms.
 Customer loyalty is indeed a determining aspect of a business’s success, and
even a minor glitch from the retailer can entirely ruin the brand’s reputation.
Many businesses fail to understand that retaining a user is about building a
steady & rewarding relationship with them over time and employing every
communication channel to materialize this relationship.
 Solution
 Building customer relationships takes both time and effort, and businesses
ought to engage their customers in different ways besides transactional
correspondence to make them feel valued. While endeavoring to offer a better
experience on the website, brands need to nurture their customers with a
personalized communication strategy.
 Loyalty stems from an emotional connection with the brand, and every
business should align its marketing effort towards building that bond. A smart
customer retention strategy will work wonders for a brand, turning the
 7. Relevant Leads
 While attracting good traffic might be achievable through promotions and
other marketing efforts, getting the relevant leads remains a challenge for
eCommerce businesses. It is no wonder that the average eCommerce
conversion rates are often minimal. It has been reported that only 2.57% of
eCommerce website visits have been converted into purchases in the United
States.
 The efforts to convert the visitor into a user can be futile if the right audience
is not accessing the website. Unfortunately, it is expected that brands fail to
communicate the right message about their product or service and hence
cannot engage the interested audience.
 Solution
 An efficient Search Engine Optimization (SEO) strategy can improve the
pages’ rank and reach the potential customers actively searching for specific
products. Additionally, running Pay Per Click (PPC) advertisements on
Google Ads can also communicate the correct information about the brand to
draw an audience with a clear intent or interest.
 For marketers, it has to be a continuous process of follow-ups. Email
marketing can be effectively used here through automated campaigns and
personalized emails to connect with those visitors who may be potential leads
over time.
8. Cyber-security :-
Cyber security is critical for E-commerce because cyber
attacks can result in revenue, data, and overall business
viability losses. When it comes to e-commerce, you
must protect your data and your customers. A breach in
your cyber security systems may lose your customers’
data. And that could cost your company the trust and
reputation you’ve worked so hard to establish.
Solution
Have a cyber security policy. A cyber security policy
establishes ground rules for everyone in your organization to
follow, stating unequivocally that critical activities must not
slip through the cracks. Second, if you’re looking for a new e-
commerce platform, look into the various security features
and options. Multi-factor authentication, customer data
encryption, real-time threat alerts, and compliance features
9. Omni-channel experience :-
Omnichannel E-commerce provides your customers
with a unified E-commerce experience regardless of the
digital device or platform. This is critical because
research shows that 73% of online shoppers use
multiple channels when shopping online.
One of the primary advantages of providing an omnichannel
experience is delivering consistent messaging about your
brand to your customers. The messaging is consistent no
matter where a customer encounters your brand.
Solution
When a company decides to implement an omnichannel
strategy, the chances are that the existing technology could
be inadequate to support an omnichannel operation. It is
critical to collaborate with the right partners. Having the best
logistics, shipping, and e-commerce partners is essential to
10. Voice-search Voice-enabled search has seen massive
traction in the past few years. With the rise of the
products in the online markets, experts predict a further
surge in demand for voice-driven user experience. This is
not surprising, considering that most voice search
queries happen when people are walking or driving
somewhere. Or, perhaps more importantly, when they
discover new places or businesses.
People searching for “best ice cream corners in Chicago” want
to find the best ice cream corners. If you are the owner of an ice
cream shop and want to attract more customers, include your
city in your keyword optimization. It is vital to understand the
significance of user intent.
Solution
When it comes to search engine results, the semantic strategy
considers the context of the user’s search rather than just the
written words.
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