Mr Dasgupta argues that this distortion of trade amounts to a massive subsidy of rich-world consumption paid by the world's poorest people.

ECONOMIST: Local difficulties

"The removal of this major market distortion should be welcomed by all UK businesses that wish to trade online, " said Richard Allen, spokesperson for Retailers Against VAT Avoidance, a group that has campaigned against LVCR.

BBC: Treasury to close loophole that allows VAT-free DVDs