The exponential growth of e-commerce has revolutionized global trade. However, this rapid expansion has also given rise to significant challenges in the realm of taxation. Taxation fraud in e commerce represents a critical issue for governments worldwide, resulting in substantial revenue losses and economic distortions. This abstract explores the dynamics of e-commerce and taxation fraud, examining the methods employed by fraudsters, the impact on economies, and the measures implemented by authorities to mitigate these challenges. Some of the common fraudulent practices include underreporting income, falsifying business locations to exploit lower tax jurisdictions, and the use of digital currencies to obscure transaction trails. Such activities undermine fair market competition, place compliant businesses at a disadvantage, and erode public trust in tax systems. To combat taxation fraud in e commerce, authorities worldwide are adopting a range of strategies. These include the implementation of advanced digital tracking systems, international cooperation for cross-border tax enforcement, and the introduction of stringent regulatory frameworks that mandate transparent reporting and compliance. Despite these efforts, the evolving nature of e-commerce and the ingenuity of fraudsters necessitate continuous innovation and adaptation in regulatory approaches.