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Why China plans to tax the booming digital economy

Huge sector has drawn government interest as revenue target but task is not easy

Now that digital commerce accounts for more than a third of its economy, China is looking for ways to more effectively tax domestic e-commerce titans like Alibaba, Tencent and Didi Chuxing.

It's a huge and growing target for filling government coffers. In 2019, the nation's digital economy generated 35.8 trillion yuan ($5.52 trillion) of revenue, accounting for 36% of China's GDP, according to the China Academy of Information and Communications Technology. The digital economy has expanded much faster than the rest of the economy over the past decade.

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