Cover Story: Why China Plans to Tax the Booming Digital Economy

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.