Tax policy won't derail online retail sector
- By Xin Zhiming
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E-mail China Daily, April 13, 2016
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'E' irresistible [By Jiao Haiyang / China.org.cn] |
China's new taxation policy targeted at imported goods sold on e-commerce platforms has drawn a lot of complaints from dealers as well as consumers, but it will not prevent the industry from expanding at a fast pace.
Last month, the government announced higher taxes would soon be imposed on most products imported by domestic e-commerce companies. On April 7, the Ministry of Finance unveiled a list of more than 1,100 imported items targeted by the new tax policy. Not surprisingly, many believe the move will deal a heavy blow to domestic e-commerce players since consumers will be forced to pay more for shopping online.
The new tax policy will, no doubt, make imported products more expensive on e-commerce platforms, including baby formula, home appliances and clothes and shoes. But given China's fast expanding middle class and high-income groups, the ripple effects of the policy will soon fade as online shopping, especially those for imported products, continues to increase in China.
The new tax policy has its share of defects, though. For example, policymakers said the policy will create a level playing field for online and offline retailers of imported goods－as online sellers enjoyed preferential tax rates－but it has been implemented too hastily for e-commerce companies to prepare for the necessary procedural changes.
The authorities announced a month ago that a new tax policy would be adopted, but the Ministry of Finance released the "positive list"－list of goods allowed to be imported and subject to the new tax policy－on April 7, just one day before it was formally implemented, leaving almost no time for e-commerce platforms to update their online product information and adjust their stocks. Therefore, the move has aroused complaints from many e-commerce players.
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