Although many countries are encouraging internet initiatives by
granting them fiscal advantages, the director of China’s State
Administration of Taxation (SAT) has revealed plans to enforce
taxation on e-commerce business in order to maximise state
revenues.
Despite recent research predicting that e-commerce in China will
be worth $12billion by 2004, many citizens currently lack essential
tools for internet transactions including credit card facilities
and computer access.
The Chinese government acknowledges that taxing the internet
will be a complicated task and it has established a special tax
force to deal with the issues arising. It is aware that the
internet is an attractive medium for tax evasion especially as it
is difficult to locate individual users.
The areas that potentially pose the greatest problems relate to
cross-border transactions and intellectual property rights. Even
so, the SAT remains determined to find a way to treat e-commerce
taxation on a par with its current measures for traditional
retailers.
