China Regulator Proposed to Impose Digital Data Tax on Technology Companies

December 16, 2020 11:00 pm

Beijing (PingWest)-Chinese government should consider imposing a digital tax on technology companies that hold large amount of user data, said Yao Qian, the director of technology supervision at China Securities Regulatory Commission.

Speaking at forum hosted by Beijing News, Yao Qian said user data is precious resource like mineral mines, so the government should levy tax on it just like levying tax on natural resource.

“Holing a large amount of user data just like factory hold precious natural and manufacturing resource, so it should not be free. The value of platform-like enterprise was created by their users, so users are supposed to share the profit with those enterprise.” Yao said.

“Platform offered coupons and red-pocket benefits to users at the early stage of development, but those welfare were used only as a marketing approach and users have not shared real benefits from revenues that have been made by platforms.” Yao added.

If Yao’s proposition go through, technology giants like Alibaba and Tencent will be mainly targets which hold the most amount of user data among technology firms in China. Yao’s proposition is the latest sign of Chinese officials ramping up their efforts to curb the growing influence of technology firms.

A few days before Yao’s proposition, the State Administration of Market Regulation (SAMR) said it would fine Alibaba, Tencent-backed e-book China Literature, and Shenzhen Hive Box for antitrust violations.

In addition, Guo Shuqing, the head of China’s Banking and Insurance Regulatory Commission, said earlier this month that there was a need to clarify data rights as it viewed data as an economic contributor like labour and capital.