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    Tax on Online Small Business Causes Dispute in China

    2017-05-26 10:26

    With the rapid develop- ment of e-commerce over the past decade, there has been controversy over how to conduct a reasonable taxation on the electricity business. There are different views on whether to continue to reduce the burden of small businesses even in the e-commerce business itself. On March 31, the State Administration of Taxation and the National Federation of Industry and Commerce jointly held a forum with a theme of "deepening tax reform to help private enterprise development". Alibaba Chairman Ma Yun and Jingdong Group CEO Liu Qiangdong expressed different views on how to conduct the taxation on small business.

    During the speaking of the business representatives, Ma Yun has followed the consistent view, calling to reduce tax burden on small and micro enterprises. Ma Yun proposed that large enterprises enjoying a lot of resources should be the main taxpayer. However the most important issue that small businesses every day have to consider is how to survive. How to make small businesses live, live well, is what the national tax leverage really should considere.

    Liu Qiangdongs view is that small businesses opening shop in the name of natural persons is not conducive to fair competition. Liu Qiangdong said:"Levying different taxation between online shops and physical shop not only causes damage to the real economy, resulting employees in physical shop unemployed, but also causes tax loss for the state, but also violates the basic business principles that the integrity of business and paying tax according to the law.

    But Ma said that "levying different taxation between on-line shops and physical shop" speech is a false proposition, "the unfairness between big business and small business" is the real problem. He said large enterprises have government policy support and various resources. Take loans as an example, as long as providing a bank statement large enterprises can get the loan. Large enterprises enjoy far more than the treatment of small businesses, enjoy more resources, so they should bear more responsibility and should be the main taxpayer.

    The reason why they have diametrically different views on the issue is that the subject of fair competition that Ma and Liu focus on is different. Liu Qiangdong said on the Weibo recently, "In the past I also support the personal shop duty-free ... but after years of development, I found that a lot of so-called personal shop is under the operation of big companies, and enjoy more special super-treatment than the store. Behind these special treatment is the unfair competition and the fact that the real economy is hurt." But Ma advocating tax cuts is more for small and micro enterprises. "If reduce the tax burden of small business there will be a large number of entrepreneurs, small and micro enterprises that can develop relying on the platform, because the ultimate goal of taxation is to promote social and economic development and promote social equity.”

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