E-commerce green paper launched

The national Green Paper on e-commerce was launched today in Midrand with an invitation to both public and private sectors to submit comment by 31 March 2001.

[VIDEO]Aimed at information and communication technology experts as well as individuals and enterprises transacting via e-commerce, the paper addresses four themes: legal and regulatory issues, building trust in the digital economy, improving the information communications infrastructure, and maximising the benefits of new technology.

[VIDEO]Speaking at the launch, Dr Hasmukh Gajjar, president of the Black Business Council, congratulated the government on the paper`s publication. It was important, Gajjar said, because SA, like other developing countries, is under great pressure to improve its readiness for electronic commerce.

Gajjar observed that while the process of e-commerce enablement was a relatively short one for big business, many smaller entrepreneurs would benefit from access to basic telephony, let alone e-connectivity.

He urged industry to keep in mind that e-commerce is about re-inventing business, not just digitising established processes that would keep smaller players out of the loop.

[VIDEO]Touching on recently established business-to-business exchanges, Gajjar advised larger businesses to be mindful of the possibility of collusion and price fixing that would arise from the use of this type of technology.

Dave Mitchell, head of the national payment systems arm of the Reserve Bank, welcomed the framework for consumer protection set out in the green paper.

[VIDEO]Mitchell said the Reserve Bank has been investigating options for e-commerce and other online financial services for some years; culminating in its sanctioning of the launch of an e-money pilot project in the Cape.

"SA is fortunate in that it has a sophisticated and well developed payment and banking system that is of a world class standard. I believe that [we] are well positioned for e-commerce and emerging electronic money products," he said.

[VIDEO]Mitchell expressed the Reserve Bank`s intention to leverage e-commerce technology to increase access to financial services to those in SA`s low income, unbanked and rural communities, as well as to solve problems, such as robbery, which are hampering economic activity.

Pravin Gordhan, commissioner of the SA Receiver of Revenue discussed the issue of taxation, quipping that while the good news was that the country had a green paper on e-commerce; the bad news was that tax breaks [in that industry sector] would soon end.

Explaining the different bases on which South African businesses are taxed, Gordhan said while developing countries desperately require revenue from their tax base to sustain economic development, these countries are the most at risk from the re-allocations in tax base that will arise from the development of e-commerce.

[VIDEO]"Fortunately, the Internet and e-commerce also have the potential to improve tax administrations` efficiency and service delivery to taxpayers," he said.

Gordhan said e-commerce had been a driver in the decision to switch SA`s tax basis from a source (where income from a source within a country, regardless of the nationality of the taxpayer, is taxed by that country) to a residence basis (where the worldwide income of a resident of a country is taxed by that country).

The change will come into effect in January 2001.

In her keynote address, Minister Ivy Matsepe-Casaburri said she expects progress towards a white paper and legislation by the end of the second quarter of 2001.

Video by Vladimir Majkic

Related stories:

E-commerce paper to be launched on Monday

E-commerce Green Paper ready by August, says department