China should establish an e-commerce tax registration system as soon as possible in the interests of taxing sellers who do business online, a deputy to China's People's Congress (CPC) proposed at the at the 5th Session of the 10th National People's Congress. The proposal is aimed at improving China's e-commerce tax system and promoting a more stable developmental environment for China's e-commerce market.

According to the statistics of China's Internet Information Center, as of June 30 of last year, China had as many as 123 million netizens. Among this number, as many as 30 million frequently shop online.

In addition to this, the latest statistics released at the 2007 China's Internet Market annual conference showed that as of the end of 2006, a trade volume of RMB 1.1 trillion (142 billion USD) had been realized in China's e-commerce market.

"The rapid development of e-commerce can serve as a vast source of tax revenue and has had an unprecedented impact on China's traditional tax system and policies, as well as international taxation," said Chen Xuexi, a deputy to CPC. "Facing the booming e-commerce market, the reform of our current tax system to promote the development of e-commerce becomes imperative. It is also conducive to China's active participation in jointly building a new international e-commerce tax system in the 21st century with other counterparts."

Therefore, Chen Xuexi suggested that China should establish a special e-commerce tax registration system and meanwhile use invoices for e-commerce only to strengthen the collection and management of taxes.

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