Simone
FOR some years now, successful online video game players in China have made real money from virtual assets. Now China’s taxman wants a piece of the action.The State Administration of Taxation announced last week that China will impose a personal income tax of 20 percent on profit from virtual money. The announcement takes aim at those who sell virtual currency to others for a profit. Taxation officials have the right to determine the original price of online virtual currency if the individual fails to provide proof of an original price, it says.The policy would cover China’s legions of online gamers, who can use online virtual currency to buy better equipment and new powers for their online characters. But it also affects millions of others who use virtual money on instant-messaging services and websites such as QQ.com to buy e-gifts. Statistics from research firm iResearch show that China’s virtual currency market is growing at a yearly rate of 15 to 20 percent, and several billion yuan worth of virtual money is traded in the market.This week’s move has become a hot topic among Internet users nationwide. In an online poll by the Sina.com, more than 70 percent of about 3,000 people who voted were against the new taxation decision. The biggest doubt is how government will determine the actual sum of money.Supporters of the new policy point to the big market of online currency trading and potential tax incomes for the State. They argue that better regulation of the industry also helps its health growth.So what do you think? Is the tax authority reaching too far?YESThis policy is too rash.1. The policymakers just tried to restrict the conversion of virtual currency into real money last year. So in theory, this kind of transaction is still illegitimate. Authorities should have legalized the practice first before taxing it.2. It’s next to impossible to supervise transactions dealt among millions of individual gamers and surfers. If the policy cannot be effectively implemented, the authority of the related government bodies will be greatly undermined.3. It’s unfair to tax individuals while Internet companies are exempt. These companies can issue as much virtual currency as they want. If the authorities don’t put any restrictions on them, they can seriously disturb the financial order.NOThe fast growth of virtual money trading needs to be regulated.1. If unregulated, virtual money trading could potentially lead to money-laundering and other crimes that affect real lives. Virtual currency trading is already vulnerable to theft and fraud. The new policy can create a better trading place.2. More tax income for the government means it can inject more money into public services and improve people’s lives. It could also help ease the burden off other people as the government finds new sources of tax and gives more tax breaks in other areas.3. Even if the authorities find it hard to fully implement this new taxation for the time being, the announcement gives people a wakeup call that all business, conducted online or offline, is taxable. It puts the entire Internet industry in better shape.
