Online shops facing registration, taxation

• Source: Global Times
• [07:54 February 01 2010]
• Comments

By Sun Zhe and Kang Yimei

Proposal would make Web buying pricier

Both running an online store and shopping at one would become more expensive for owners and shoppers alike if a new government proposal to register web businesses takes effect.

Citing consumer rights protection and the need to fight fraud, the State Administration of Industry and Commerce, the department in charge of business registration and regulation, said late last month that it has been drafting a new policy to register and tax web stores.

"Like any other business, web stores should be registered and taxed according to the law,"said Wu Song, an official with the press office of the Beijing Bureau of Industry and Commerce. Beijing became the first city in China to announce a web store registration and taxation policy in August 2008, but no shops have registered to date because the city has not enforced the policy.

Usually the registration fee for a store varies for different areas, but would about 100 yuan ($ 14.6) to 200 yuan, and the taxation would be 3 percent of their sales.

There were no details as to when the policy might be official or how it would be enforced.

The number of web stores broke the 1 million mark in October 2008, according to Beijing-based Intelli Consulting.

About 4,700 complaints on online stores were investigated in Beijing in 2009, with 1,067 prosecuted, according to the Beijing Bureau of Industry and Commerce.

Shopping safely

Zhu Feng, a 30-something employee with the Hebei subsidiary of China Unicom, was cheated after he paid 980 yuan ($143) for a Nokia handset during a sales promotion last May launched by Alipay, the third-party payment platform with Taobao.

"It was super cheap, because it was about 3,000 yuan ($439.4) in the real market,"said Zhu.

"But the seller wanted me to wire the money directly to a bank, rather than through a third-party payment system."

The third-party payment system transfers the money to the seller only after the buyer receives and is satisfied with the goods.

"But it was a price I couldn't refuse and eventually I sent the money,"said Zhu.

The bargain proved only to be "bait,"after he and other victims never got their cell phone after paying.

About 30 others were also cheated by the cell phone shop before its website can never be opened, but after tough negotiations they were paid back by Alipay.

But there are also many satisfied customers who prefer shopping with their mouse rather than their feet.