Work underway for potential e-commerce tax

The Chinese Commerce Ministry's spokesperson Yao Jian has confirmed that research is underway for a potential e-commerce tax.

"Tax should be managed by the financial and taxation authorities. Our financial and taxation authorities will regulate the taxation laws and orders. We also learned that relevant departments are working on the research on e-commerce tax. Our overall goal is to promote the healthy development of the industry and further promote and regulate it in its development."

The notion was first put forward to the government at this year's NPC and CPPCC sessions.

Recent reports have been suggesting that the new legislation being worked on may see a 5-percent tax levied on online shop owners.

Official figures show the total transaction volume in the Chinese e-commerce market exceeded 8-trillion yuan in 2012.

That's an increase of some 32-percent compared to the previous year.

Online sales here in China are also growing at 4-times the rate of retail goods sold at brick-and-mortar operations.

Paul James spoke more about the issue with Benjamin Cavender, Associate principal at China Market Research in Shanghai.