China should consider digital tax for large tech firms, official says

“China should consider imposing a digital tax on technology companies that hold copious amounts of user data, a securities watchdog official was quoted as saying by Beijing News, in the latest sign of widening government scrutiny of the sector,” Reuters reported.

Yao Qian, science and technology supervision bureau chief at the China Securities Regulatory Commission, added that the value of such enterprises was created by users, and those users should get to share the profits with those companies.

“Coupons and red-pocket subsidies offered by those platforms at their early stage of development are used more as a marketing approach,” Yao shared during a forum held in Beijing. “As representatives of the public, governments should study in depth whether it’s necessary for them to levy digital taxes to platform-like enterprises, just like they levy taxes on natural resources.”

According to the report, China has been strengthening its supervision of large tech enterprises, including titans Alibaba and Tencent.

This year, the head of China’s Banking and Insurance Regulatory Commission Guo Shuqing has said that the use of consumer data has become one of the government’s key issues. The official also shared that it is necessary for these enterprises to specify the rights of different parties regarding their personal data.