|Wang Jun was
also in the Global Tax 50
Wang Jun, China's commissioner for the State Administration
of Taxation (SAT) in the Republic of China, has continued to
hold an influential position in the biggest developing
country's complex tax system.
Celebrating his third year in the Global Tax 50, his
influence on taxation is unending. International Tax
Review talked to the commissioner about the key tax
developments in China and found out what China will focus on in
the year ahead.
China's tax system has undergone a significant amount of tax
reform in 2016. Its work in the G20 Summit and the Forum on Tax
Administration 2016 has led to a number of fiscal policies
being released that are aimed at strengthening China's tax
system. During the Forum, Wang said that the next five years
will be crucial for China to achieve taxation
He highlighted the transformation of China's indirect tax
system, which has replaced its business tax with a VAT model,
as the most significant tax development for China in 2016. It
is the largest tax reform that China has had since 1994 and is
expected to relieve pressure for taxpayers at a time when
economic growth has slowed. Wang said it is an attempt to
contribute Chinese "wisdom" to the development of global
indirect tax models. A major challenge of implementing VAT,
according to Wang, was to reduce the tax burden and decrease
the compliance burden for all sectors that applied for the tax
on May 1. "I am proud to say that I have delivered on the
promise," Wang said.
China's introduction of VAT is a notable development for
jurisdictions that are preparing to implement an indirect tax.
Reflecting on its implementation, Wang highlighted the
following three points as key to its progress. "First, tax
reforms shall be conducted in close and appropriate response to
the demands of economic development of a country at different
stages. Second, the implementation of institutional reforms
needs to be supported by corresponding reforms at the
operational level, i.e. tax administration, service, technology
and personnel. Third, for a reform of this scale and impact, it
is always important to mobilise resources and wisdom from
different levels of the tax offices, from both state offices
and local offices, and from other government agencies as well.
It is also important to tend to voices of the taxpayers."
Other notable developments include the implementation of the
Internet & Tax initiative, which has greatly enhanced the
effect and efficiency of tax administration in China. "With the
completion of China's revolutionary tax modernisation project,
the Golden Tax Project (Phase 3) on October 1, the SAT has, for
the first time ever, been able to move all tax data onto the
same IT platform, which will in turn be accessible for all
levels of tax offices," said Wang.
China has continued its efforts in addressing tax avoidance,
enhancing tax transparency and building up capacity for
developing countries. Highlighted at the G20 leader's Summit,
the extensiveness of participation in the common reporting
standard, the multilateral competent authority agreement, the
multilateral instrument, and the intensified effort to work
together to improve capacity building for developing countries
have been noteworthy strides in the BEPS Project.
"The importance of cooperation between tax administrations
across countries has also been highlighted, whether for the
purpose of better administering the taxpayers or better serving
them," Wang said. Meanwhile, the importance of resolving
disputes for taxpayers through the mutual agreement procedure
(MAP) is well–recognised – the SAT more than
doubled human resources devoted to MAP in August 2016.
"I see 2017 as a good time to build on the momentum of the
VAT reform to promote VAT legislation in China. The efforts to
further reform the relationship between state and local tax
offices, optimise tax service, and enhance tax compliance will
be continued," said Wang. "On the front of international
taxation, the SAT will step up effort to balance its focus on
inbound and outbound taxation. It will also further improve
some of the existing rules to add more certainty and clarity.
Also, with more countries joining hands to foster international
cooperation, I have faith in a fruitful 2017 for international