|Lou Jiwei was also in the Global Tax 50 2013|
Lou Jiwei, one of China's most outspoken and well-respected politicians, made a monumental development when he proposed a new international taxation system to tackle tax avoidance at the annual G20 summit in the Chinese city of Chengdu in 2016. Lou, who was appointed as the minister of finance in March 2013, also held a central position transitioning China from a business tax to a VAT regime, which was completed in May 2016. This wins him a spot in the Global Tax 50 as one of the most influential people in tax.
For many years, China's indirect tax system was split, with VAT applying to the goods sectors, and business tax applying to the services sectors. Since 2012, China has embarked on a journey to change this system and replace the business tax with VAT, with the final sectors transitioning from business tax to VAT nationwide on May 1 2016.
"When fully implemented, China's VAT system will be one of the broadest-based systems among more than 160 countries in the world which have now implemented a VAT or equivalent tax," KPMG China's Khoonming Ho and Lewis Lu told International Tax Review in April.
Lou inadvertently caused quite the stir when he was axed from his role as finance minister and replaced by bureaucrat Xiao Jie in November, two years before his term ended. While Lou was unlikely to be reappointed when the next term began in 2018, there was no explanation as to why the outspoken reformist was replaced, but news reports suggested that this happened because of the global concern over China's economic slowdown. But before his sudden departure, he made an impact at the G20 meeting, where he said that the G20 should play a leading role in improving the international tax governance and support the development of a new international tax system.
"[The] G20 should continuously expand and deepen international tax coordination and cooperation, and support the development of a new international tax system which is fair, equal, inclusive and organised," Lou said.
© 2019 Euromoney Institutional Investor PLC. For help please see our FAQ.