MANILA - Attorneys, government officials and Internet entrepreneurs Wednesday scoped out the hard work that still needs to be done in the wake of laws passed to facilitate e-commerce, focusing on the Philippines' recently approved E-Commerce Act of 2000.
A wide range of speakers at an e-commerce forum leading up to the Global Information Infrastructure Commission's (GIIC) Asian Regional Conference agreed that the devil is in the details for grafting the promise of e-commerce onto the reality of problems such as taxation and contract law.
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"Beneath the excitement of [the Internet economy] is very tough work ahead that includes changing legal regimes . . . changing legal practices and changing the way governments do business," said W. Bowman Cutter, managing director at New York investment bank E.M. Warburg Pincus & Co. and a GIIC commissioner.
The Philippines' E-Commerce Act, passed in June and promptly signed by President Joseph Estrada in the wake of the Love bug virus believed to have originated in the Philippines, drew attention for its antihacking provisions but aims primarily to make it easier to get e-commerce going in the developing island nation.
Estrada on Thursday signed the first Implementing Rules and Regulations for carrying out the law.
The main points of the law are making digital signatures legally binding and promoting the universal use of electronic transactions, said William Torres, president of ISP Mosaic Communications and a lobbying force behind the bill.
The law gives the national government 2 years to make all government business available on the Web, through a portal called RPWeb.
Translating those good intentions into a well-oiled Internet economy will mean going up against some complex issues both new and old, panelists said.
The global nature of the Internet automatically complicates any regulation the state wants to craft or enforce, because the government doesn't have jurisdiction over many of those selling products and services online, said J.J. Disini, a partner at Disini and Disini Law Firm, in Manila. That means the government can't prescribe, adjudicate, or enforce laws covering those businesses, he said.
A particularly tangled problem will be taxation of Internet transactions and of income earned on the Internet.
"The Bureau of Internal Revenue will have to restructure its existing tax administration system," said Lilia Guillermo, deputy commissioner of the Philippines' Bureau of Internal Revenue. It has mapped out its intentions - to tax Internet commerce and income no more or less than those in the physical world, and prevent double taxation by the Philippines and another nation, for example - but has a lot of work left to do, she said.
Mobile commerce, via Wireless Application Protocol handsets or even notebook PCs, may present a vexing tax problem, said Carol Carreon, managing director of SAP Philippines and a former Bureau of Internal Revenue official.
The E-Commerce Act defines the location of a transaction as wherever the customer may be when the purchase is made, even if that is outside the tax agency's jurisdiction, she said. A fixed address couldn't be used to enforce taxes against a Philippines resident in that case, she said.
Carreon also expressed concern that a larger country might overstep the Philippines tax laws when business is done in cyberspace, she said.
"I hope the issue of competition [for tax revenue] will not come into play," she said.
Any system set up for electronic transactions will have to be free of time-consuming complexities for the end user, one local Internet entrepreneur told the forum.
"The whole idea here is making the signatures go seamless. If they don't work seamlessly, the whole benefit of e-commerce is lost," said Gamaliel Pascual, co-founder and president of SecureTrade, a Manila-based application service provider that sells online trading software to brokerages.
The recently passed law is just the beginning, said Ramon Ike Villareal Seneres, director general of the National Computer Center, an arm of the president's office that consults with him on information technology matters.
"We did our best, but it's not really a perfect document," Seneres said.
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