Beijing should impose digital tax on big data companies: government-backed Beijing News

In the latest sign of heightened government scrutiny over big technology companies, Beijing in a report News stated, China should consider imposing a digital tax on technology companies that hold vast amounts of user data.

“Some third-party platform-like enterprises hold a large amount of users data, just like holding precious mineral mines,” said the state-backed newspaper citing Yao Qian, a science and technology supervision bureau chief at the China Securities Regulatory Commission (CSRC).

“The value of the platform-like enterprises was created by their users, and users are supposed to share the profits with those enterprises,” said Yao. “Coupons and red-pocket subsidies offered by those platforms at their early stage of developments are used more as a marketing approach. As the real creators of corporate value, users have not shared real benefits from revenues that have been made.”

He went on to add, “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.”

Beijing has vowed to strengthen oversight of its big tech companies, including Tencent Holdings and Alibaba Group Holding, which rank among the world’s biggest companies.

“The use of consumer data, in particular, has become a key issue for the government,” said Guo Shuqing, the head of China’s Banking and Insurance Regulatory Commission, earlier this month. “There is a need to clarify data rights as it viewed data as an economic contributor like labour and capital.”

“Big Techs have de facto control over data…It is necessary to clarify data rights of different parties soon, and improve data flow and pricing mechanism,” said Guo.

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