LONDON -- Internet shopping in Britain could cost the government up to 10 billion pounds (US$15.89 billion) a year in lost taxes, the Institute of Directors said Monday.
The IOD-commissioned a report showing that Britain is undergoing a revolution in e-commerce shopping.
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It found that almost 1.5 million Britons shopped on the Internet up to June. This was 44 percent up on a similar survey in December.
Online spending will rise from about 3 billion pounds this year to 9.5 billion pounds by the end of 2001, it forecast.
"We could be talking anywhere between 5 billion and 10 billion pounds of lost taxes a year," said IOD policy unit spokesman Richard Baron.
The report said the taxman was already missing out on value-added tax, or VAT, payments from music and software bought and downloaded from overseas suppliers.
But it forecast that the tax shortfall would spiral as tax authorities continued to miss out on VAT payments on a huge range of other goods.
"Businesses buying from abroad account for their own VAT. That's OK, because they have the experience to do it but the average private shopper doesn't," Baron said.
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