China e-commerce evaded $15.9B in tax in 2012

China e-commerce evaded $15.9B in tax in 2012

Summary: The industry is accused of rarely filing taxes prompting calls for tighter regulations from the head of retail chain store group Bubugao who will be a representative at the National People's Congress.

TOPICS: E-Commerce, China

China needs to step up its e-commerce regulatory oversight as online shopping sites rarely file taxes, said the head of retail chain store group Bubugao.

Chinese online shopping sites rarely file taxes, says head of retail store chain.

A report Tuesday cited Wang Tian, president of Bubugao Group, also known as Better-Life Commercial Chain Share, said "not giving receipts and not filing taxes" has been a secret rule for online shopping sites. Citing an unnamed report, Wang said online shops only give receipts for 30 percent of their sales which means that 70 percent of sales is not charged taxes or service charges.

According to Wang, who is a representative at the National People's Congress which has just kicked off, online shopping platforms have evaded taxes of more than 100 billion yuan (US$15.9 billion) in taxes in 2012. He added just online shops hosted on Alibaba's platform alone have evaded 35 billion yuan (US$5.6 billion) in taxes.

Wang said the lax regulation for e-commerce was unfair to physical retail stores. He said physical stores needed to pay a higher amount in rent, labor and training fees, and utilities. He recommended that China immediately set up regulations for taxing e-commerce players.

In China, e-commerce is widely popular due to consumer demand and Internet access outpacing the prescence of phsyical retail stores. Last November, the Ministry of Industry and Commerce said it building a regulatory system and implementing a data management framework to collate and monitor all online transactions.

Topics: E-Commerce, China

Liau Yun Qing

About Liau Yun Qing

The only journalist in the team without a Western name, Yun Qing hails from the mountainy Malaysian state, Sabah. She currently covers the hardware and networking beats, as well as everything else that falls into her lap, at ZDNet Asia. Her RSS feed includes tech news sites and most of the Cheezburger network. She is also a cheapskate masquerading as a group-buying addict.

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  • Indian E commerce evading Taxes

    E commerce in India has become Multi billion dollar business in past five years, But because of lack of taxation framework for E commerce, E commerce industry is evading millions of dollars in taxation. They don't pay CST or VAT for different States. They take online orders and just deliver the material via Courier services.

    This is very unfair to the retailers who are paying 2% CST then 10-15% of VAT to the State Govt. This system forces them to become incompetent.