Could virtual existence end up costing businesses more?

||

Companies that are particularly immersed in the Internet may have raised their eyebrows recently with the news that an EU nation is planning to impose a tax on internet data transfers.

In Hungary, a tax bill handed to the nation’s parliament on October 21st has recommended that providers of internet services should pay 150 forints (approximately 40p) per gigabyte of data. This has led companies and consumers in the Central European country to voice concerns that providers may look to compensate for this by charging more for their services, thus hitting Hungary’s business economy.

With the U.S. having introduced a tax on online retailers so as to protect the high street, and whispers of similar measures here in the UK, are we reaching the end of the era in which companies can freely and inexpensively sell their goods and services online?

An economical measure?

On the whole, operating online has become a way to cut costs by limiting physical assets. For a retailer, for example, it’s different from selling in a store in that the inventory does not need to be tangibly in front of the customer. An empty brick-and-mortar shop will not attract customers, but there is no problem with emptiness in an office from which a retail website is run, provided that access to stock is available. This is before we consider the costs associated with buying and maintaining a high street store.

However, some business analysts argue that this places an unfair burden on physical stores and that, given that high street stores attract people to town centres, any decline suffered by them will affect the vitality of an area, with fewer people visiting restaurants and using other local businesses as a consequence.

How might this affect businesses?

It will be interesting to see how governments around the world deal with online business – a phenomenon that has almost moved too quickly for tax legislation to cope with – over the next few years. One possibility is that, as authorities look to address the trend of conducting business online, companies will be faced with new tax and economic challenges.

One way a business owner can ease any burden that might arise is through the help of a financial outsourcing service. By leaving their accounts in expert hands, business owners can give themselves more time to look into multichannel marketing and ensure that they are not falling foul of any changes in legislation.