The global nature of e-commerce means that some aspects of tax management can no longer be carried out at the national level. However, the taxation of e-commerce should be consistent with the basic principles of international taxation, it should avoid double taxation, and should be simpler to administer and understand. Proper utilisation of advance technological developments would simplify collection of taxes, which is essential to maintain current consumption tax systems. This paper proposes a pragmatic approach in adapting the existing mechanisms in order to develop an on-line collection and compliance system for taxation of e-commerce. The proposal utilises a combination of infrastructure providers, authentication bodies, and tax administrations in order to create a feasible and dependable system. In the first instance, it provides with the means of creating a dependable and verifiable mechanism enabling a supplier to distinguish between registered businesses and private customers. Authentication is accepted as a key to generating the trust needed for e-commerce to flourish, and I believe that this must also be extended to the tax status of participants. The process of authentication would be supported by clear and uniform product classification; this element of the compliance system would come from international coordination of respective national tax authorities. The central element to the proposal is the effective utilisation of technology that has created Internet and e-commerce.