Beijing's municipal government is ordering anyone who conducts business on the Internet to register and pay taxes for all online transactions. The only exceptions are people who sell or swap goods and can prove that these sales or swaps are not for profit.
There can be a guilty little pleasure in selling products online, avoiding the sales tax that brick-and-mortar stores impose. But the benefit will end on August 1st in Beijing. Starting next month, the city will require all online vendors, whether individuals or big businesses, to register at local taxation bureaus and pay taxes on their online transactions. The rule does not apply to people who sell or swap personal goods not for profit.
But some web operators say they're confused about the policy, since the rule didn't specify what goods could be tax-free. Some others argue that the new rule could hurt the profits and competitiveness of Beijing sellers.
Some individuals also argue that their on-line businesses are just part-time occupations. And that they may be forced to shut down their internet stores as a result of the new rule.
China currently has 55 million internet shoppers, who each spend an average of 1,000 yuan online each year. Cyber shopping revenues in China hit 50 billion yuan last year, nearly double that of 2006. The country is expected to replace Japan as the largest online shopping market in the Asia-Pacific region in 2010, with 480 million online shoppers spending close to 10 trillion yuan by then.
But business operators, particularly those of small groups or individuals, have long been ignored by the country's taxation authorities.
Exerts believe the aim of the rule is to better regulate businesses and curb unscrupulous trading in China, not to kill the booming E-commerce market.
They also suggest it's unfair to use regional regulations to control the borderless online market. They believe the tax authorities should work out more rules to better supervise market activities, while protecting the rights of consumers.
(CCTV July 10, 2008)
