Requirements for Subjecting E-Commerce to Digital Taxation in Libya: Between Reality and Expectations

Abstract

This study aimed to examine the reality of current Libyan tax legislation and its capacity to accommodate e-commerce transactions, identify the necessary requirements for building an effective digital tax system in Libya, and present proposals for the digital tax regulation of e-commerce in Libya. The study employed a descriptive-analytical approach and reached several key findings, summarized as follows: the Libyan tax system completely lacks any legislation that explicitly addresses the activities and financial flows resulting from the digital economy and e-commerce; and the Libyan tax administration generally suffers from weak operational and technological readiness. Consequently, this necessitates the provision of flexible regulatory and legislative frameworks that align with tax sovereignty and equity standards, alongside enhancing the capabilities of tax personnel through specialized training programs. Furthermore, a review of international experiences supported by the International Monetary Fund (such as the Kontaktu platform) demonstrates that adopting simplified, open-source models provides the Libyan economy with an ideal and financially viable opportunity to overcome funding constraints and initiate the gradual digitalization of tax returns and collection at the lowest possible cost.