China plans online sales tax

The State Administration of Taxation is researching a sales tax on e-commerce.

It's not the first time the issue has come under the spotlight. The plan to levy online sales tax was raised in 2012 but stalled due to a lack of feasibility, as most small online retailers don't register their businesses.

The issue has become increasingly pressing as China's e-commerce market has jumped to the world's largest. According to statistics from the China E-commerce Research Center, the value of China's e-commerce industry surpassed 10 trillion yuan ($1.6 trillion) in 2013, while the US e-commerce value was $262 billion. More than 300 million people shopped online, a 24.7 percent year-on-year increase.

Big online retailers such as JD.com and Suning.com are promoting the use of electronic receipts, currently only available in a few regions. They prefer a large-scale online sales tax so that the competition could be leveled. But industry experts say the tax would push many medium and small online retailers out of business and suggest some kind of tax relief.

In 2013, online retailers sold over 1.85 trillion yuan ($300 billion), which could potentially generate tax revenue of tens of billions of yuan. But it's only a small portion of China's total annual tax revenue of 13 trillion yuan ($2 trillion).