China Pledges Tax Support For 'Belt And Road Territories'
Mary Swire, Tax-News.com, Hong Kong
22 May, 2018
The tax agencies of China and Kazakhstan, with involvement also from the OECD, hosted a three-day tax conference to discuss the provision of capacity building support from China for those countries that will be involved in China's Belt and Road Initiative. It was attended by more than 250 delegates from 49 tax administrations, four international organizations, and five academic institutions.
In a statement following the conference, the Chinese tax agency said that even though Belt and Road jurisdictions vary in economic conditions and cultures, they face common challenges. The agency said the conference was an opportunity for tax authorities and businesses to exchange views and discuss the role of effective tax rules and policies in facilitating trade and investment. China pledged its support for countries involved in the initiative and its cooperation in tax matters.
According to the Chinese tax agency's statement, delegates agreed that stronger support is needed to achieve better coordination and cooperation amongst tax administrations of Belt and Road jurisdictions. They agreed to enhance cooperation in tax matters. The possibility of long-term tax coordination and cooperation in a more structured and institutional format under the Belt and Road Initiative framework was explored during a side meeting of the conference, the agency added. In its statement, Kazakhstan's Finance Ministry welcomed China's engagement and the announcement of the aforementioned "One Belt, One Way" tax cooperation initiative.
The Belt and Road initiative is a Chinese-led strategy to bind the economies and cultures of more than 60 countries by land and sea. It comprises a land-based Silk Road Economic Belt integrating trade and investment in Eurasia and an ocean-going Maritime Silk Road extending to Indonesia, South Asia, the Middle East, and Africa. The aim is that by 2050 the Belt and Road region will account for 80 percent of global GDP growth, and three billion more people will be advanced into the middle class. As part of such, China has signed a number of agreements to support other countries to develop tax-privileged economic zones within their territory, as part of its push to further its trade relations along the Belt and Road.
In February 2018, the Chinese Govenrment noted that new foreign investment worth USD14.36bn from Chinese firms has resulted in a tax windfall of USD1.14bn for host countries along the "Belt and Road." Another 19 new overseas economic and trade cooperation zones were set up in countries and regions participating in the initiative in 2017, the Government said, and 2,330 new enterprises were established.