This study aims to provide recommendations for regulating e-commerce in Palestine, with the goal of identifying the legal, institutional, and procedural framework necessary for e-commerce taxation, without impeding its development or compromising the competitiveness of the Palestinian retail industry. The study used a critical analytical methodology and interviewed e-commerce experts, representatives of official institutions, and representatives of Palestinian e-commerce companies. The study found that Palestine has a legal infrastructure that can effectively regulate e-commerce, such as the Consumer Protection Law, the Local Products Fees Law, and the Electronic Crimes Law. However, enforcement of these laws and related regulatory measures is ineffective. The study also anticipates a need for long-term development of specific legislation for e-commerce to account for the expected growth of the industry as well as the developments occurring in the digital environment (internet proliferation, smart devices, digital economy) and digital payment methods in Palestine and globally.