Back in June, Shacknews reported on the effects of popular virtual currencies on the Chinese economy. The Chinese government has responded by taking a piece of that cottage industry for itself: the nation is instituting a 20% personal income tax on profits made from virtual currencies.

The tax, announced today by China's State Administration of Taxation, "specifically takes aim at those who buy virtual currency from gamers and surfers and sell it to others at a mark-up," according to a Wall Street Journal report noticed by Gamasutra.

Under the new law, the 20% tax will be levied on individuals--not corporations--who profit from selling virtual currencies. The policy applies to gold farmers in MMOs like World of Warcraft as well as those in China's booming market for Web-based virtual currencies, such as QQ Coins used in Tencent's popular instant messaging program QQ.

The tax has met a lukewarm reception among Chinese internet users, to the surprise of few. However, one of the detractors' arguments stands out: valuing virtual currencies for tax purposes may prove difficult, as the Chinese government has banned pegging virtual currencies to the yuan. "It's difficult to prove the original value of virtual currency," said a blogger in the Journal's report.

Over 4 million of China's youth are addicted to what the state deems "unhealthy" online games, claims a Chinese lawmaker.

The 4 million represent ten percent of Chinese internet users under 18, according to the AFP. The term "unhealthy games" could refer to any number online games including Blizzard's World of Warcraft, which boasts millions of subscribers in China. The same games were called "spiritual opium" by another Chinese lawmaker earlier this year.

In the announcement, the Chinese government calls for hard-coded time limits in games and stricter content monitoring in games. Previously, the government has tried a number of methods to curb internet addiction, including cybercafe age and time limits.