China Sets New Tax Goals

March 17, 2010 Taxation in China

Chinatown Parade celebration of 60 years of the PRCThe Government of the People’s Republic of China (PRC) has set out five macro-level goals that will be upheld in its approach to taxation policy in 2010, and taxation authorities of all levels must also follow three new “transformations”, in order to best implement the new goals.

At the recently convened National Taxation Policy and Regulation Working Conference in Shenzhen, Xie Xuezhi, Deputy Administrator of the State Administration of Taxation (SAT), relayed the Chinese Government’s praise to national tax authorities in implementing tax policies and regulations in 2009. He said that in 2010 the Government intends to build upon the progress by implementing five new wide-reaching goals in tax policy implementation.

The new goals consist of sustaining the PRC’s stable and rapid economic development alongside the acceleration of economic restructuring measures; strengthening economic and taxation regulations while making efforts to improve the overall well being of the population; utilizing taxation policy to increase the national economic potential and exploring underutilized sectors; attempting to moderately increase tax revenues while maintain the current levels tax policy restructuring; and, widening the tax base and perfecting the current scope of the tax system.

The PRC Government’s tax policy goals are accompanied by a set of three “transformations” which are mandated to be implemented across all levels of tax authorities and departments in the PRC. The objective of tax authorities will now primarily concentrate on the regulation of tax administration acts, and not on the previous priority of regulating the enforcement of tax laws. In regards to the promotion of tax policy, authorities are now instructed to treat legislation as an overall mechanism with each aspect being part of a greater ensemble, and no longer concentrate on any specific sector of tax legislation. The current system of tax authority internal management, centering on control and restriction, needs to be replaced with a system of precautions, guidance, regulations, supervision and motivation.

Photo by metaxin