China Moves Towards Digital Cross Border Belt & Road Initiative Tax Administration & Services

Chinese tax authorities are keen on introducing mutual BRI tax digitalization to optimize a cross-border mechanism for better coordination in tax administration and to offer tax-related consultation services to taxpayers in jurisdictions along the Belt and Road Initiative.

Wang Jun, head of the State Taxation Administration of China, has proposed more opportunities for cooperation and tax-related knowledge-sharing among BRI jurisdictions, to boost investors’ confidence in economic and trade exchanges, and to improve a sense of certainty in tax matters across BRI economies. 147 countries have signed off MoU with the BRI.

China has experience in building a digitalized tax system, and the nation would be willing to share its expertise with BRI economies, Wang said, saying that China will build a national e-invoice service platform by the end of 2021, providing taxpayers with 24-hour online services in invoice application, issuance, delivery, and inspection.

“In the next few years, we will expand e-invoice to cover all relevant fields, the whole procedure of invoice issuance and all information on invoices,” he said.

2021 marks a breakthrough in the reform of tax collection and administration in China. The country is targeting to improve the business environment and promote high-quality development.
Digitalized, smart, and intelligent tax governance is one of the features of China’s deepening fiscal reforms.

Tax authorities are promoting the use of electronic invoices and tax-related big data, to improve the efficiency of tax collection and administration, following a high-level guideline issued by the central government in March. The move optimizes tax law enforcement, services and supervision.

Basic systems for new tax law enforcement, taxpayer service and supervision will be built by 2023, Wang said, a timeline that has been indicated in the country’s 14th Five-Year Plan (2021-25).

“Whole-process smart control, round-the-clock online service, wide-coverage customized service, and tax governance by data” were some key phrases that Wang used to describe the features of the modern tax administration system.

“By 2025, we will have achieved prominent results in deepening the reform of tax collection and administration system, built a powerful smart taxation system, formed a domestic first-class intelligent administrative system,” he said.

In 2019, Wang was elected the chair of the Belt and Road Initiative Tax Administration Cooperation Mechanism Council, an official multilateral tax cooperation platform jointly initiated and established by tax authorities of the BRI jurisdictions. There are 36 council member tax administrations and 30 council observers by far, including from BRI nations such as Italy, Kazakhstan, the UAE, Sierra Leone, and Uruguay amongst others. 50 countries have thus far joined, along with regional tax institutions such as the Asia-Oceana Tax Consultants Association, the Inter-American Centre of Tax Administration, the West African Tax Administration Forum, the International Tax & Investment Centre, the ECD and the IBFD.

Two years ago, China held the First Belt and Road Initiative Tax Administration Cooperation Forum in Wuzhen, Zhejiang province, to expand international tax cooperation among BRI economies. The mission statement can be accessed here.

Since then, the mechanism has launched and expanded tax training programs, which helped developing countries enhance their tax administration capacity.

The Second Belt and Road Initiative Tax Administration Cooperation Forum, chaired by the State Revenue Committee of the Ministry of Finance of Kazakhstan, was held online last month, focusing on digitalization of tax administration in BRI jurisdictions.

During 2021, the BRI tax cooperation mechanism has made available four primary training courses online, including tax dispute resolution, digitalization of tax administration, taxpayer service and value-added tax reforms.

Wang also called on tax authorities in the BRI jurisdictions to stick to the principle of consultation and contribution for shared benefits, in order to deepen international collaboration, reinforce bilateral and multilateral platforms, so as to promote work exchanges, experience sharing and capacity assistance in tax administration.

China welcomes more jurisdictions to join the mechanism to improve the cooperation network, share practices of tax collection and administration, and promote the continuous improvement of tax governance efficiency, he said.

“We will improve the tax environment to boost the development of enterprises, create a model international cooperation platform to advance trade and investment liberalization and facilitation in BRI jurisdictions, and to realize the 2030 Agenda for Sustainable Development by the United Nations.”

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