Tax-evading businesses immoral, says Jack Ma

Alibaba Group chairman Jack Ma Yun has stirred up a hornet's nest after telling a television interviewer that firms which avoided paying taxes were immoral.

Ma made the comment on a CCTV talk show recorded on the eve of the nation's biggest online shopping day on Monday, when transactions on Alibaba's major retailing platforms - Taobao and Tmall - topped 35 billion yuan (HK$44.5 billion) as discounts fuelled customer demand.

"We support levying tax, and I've always firmly believed that it's immoral if businesses don't pay tax," he said while sitting down with host Wang Xiaoya.

Ma said infrastructure provided by society at large was essential for businesses to operate and it was only fair that firms paid their share for it through the tax system.

The teacher-turned entrepreneur said it was right that 94 per cent of sellers on Taobao did not pay tax as their annual sales revenue was below the 240,000 yuan tax threshold.

"But those 6 per cent who do need to pay taxes are being watched by too many organisations whose only job is to check on sellers whenever they are doing well in sales," Ma said.

Analysts widely expect the central government to begin imposing a sales tax of up to 5 per cent on the mainland's online vendors, cashing in on sales they reckon were worth about 1.3 trillion yuan last year and are forecast by Bain & Co to be almost three times that by 2015.