Document Type
Article
Publication Date
3-8-2010
ISSN
1048-3306
Publisher
Tax Analysts
Language
en-US
Abstract
Marketplace technology is (inadvertently) chipping away at the effectiveness of consumption taxes – the Japanese Consumption Tax (CT), the European value added tax (VAT), and the American sales tax (ST) are all affected. Frequently a technology-patch or a law change can repair the tax-damage, but sometimes even though a patch or a change is known the design of the levy (or the politics behind the design) impedes application. This paper assesses these consumption taxes by considering the impact that virtual travel agents have had on revenue yields. The paper draws specific conclusions for the Japanese CT, because this consumption tax seems particularly vulnerable to these intermediaries. Based on the structure of the Japanese Consumption Tax and estimates drawn from the performance of virtual intermediaries in the other consumption taxes, this paper estimates that approximately ¥26,532 million in CT has not been collected in Japan each year for the past eight to ten years. This is the case even though guests may believe that they have paid a full measure of the CT to reservation agents when on-line reservations have been made through virtual travel agents.
Recommended Citation
Richard T. Ainsworth,
Virtual Intermediaries: Consumption Tax Problems in Japan, Europe, and the United States - The Case of the Virtual Travel Agent
,
in
57
Tax Notes
865
(2010).
Available at:
https://scholarship.law.bu.edu/faculty_scholarship/1477
Included in
Accounting Law Commons, Banking and Finance Law Commons, Business Organizations Law Commons, Computer Law Commons, Law and Economics Commons
