This article provides a literature and current practice review of developments in the taxation of e-commerce and considers how Internet transactions should be monitored and are, or can be, captured for tax revenue. This must be achieved with adherence to the desirable principles of an effective and efficient taxation system. The article considers the current situation in New Zealand and evaluates the global practice, suggesting possible planning and action that could be taken by the New Zealand Government. In a time of depressed revenue-gathering, future revenue should not be lost due to the increasing use of the Internet for transactions and business. This article considers the question: does the Internet give rise to tax issues that need attention if a tax leakage is to be avoided? It looks at the current world trends, aspects of Inland Revenue commentary on e-commerce and considers current practice and possible planning opportunities for the New Zealand Government.