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China proposes global tax measures at G20 meeting

G20

China's finance minister Lou Jiwei has put forward plans to develop a new international tax system at the recent G20 meeting in Chengdu, as the global movement to close discrepancies in tax laws in various countries to combat tax evasion continues.

The meeting is the last of its kind until the G20 summit in September, with participating countries having already reached certain milestones in helping to reduce tax evasion.

A total of 85 nations have already agreed to measures that include combatting base erosion and profit sharing (BEPS).
Loui claims a new global tax system needs to be fair, equal, inclusive and organised in a way that is able to cope with globalisation, while boosting tax coordination and promoting economic growth in a sustainable way.

Doing so, according to Lou, would help to broaden global, regional and multilateral tax cooperation, while also avoiding overlap and discrimination.

His comments come amid the G20's reiterated calls for a standard to be set for the automated exchange of information by 2018, while there have also been fresh calls for the signing of the of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

Currently, a total of 96 countries and regions have promised to exchange taxation information automatically.

Taxing e-commerce

April saw China place a tax on a goods imported by through e-commerce platforms by way of implementing a combination of  tariffs, value-added tax (VAT) and applicable consumer taxes.

That move ended the previous situation that saw consumers pay a small amount of tax on goods imported through e-commerce channels, which had previously undermined many domestic Chinese manufacturers.

While Lou agrees there is a need to tax e-commerce, financial technology and other public tech services, such as Uber, taxing the digital world was still difficult.

Other problems still in need of addressing include the reformation of property tax, which Lou claimed is unlikely to be drafted until legislators finish their term in 2018, despite being on the minds of government officials for 13 years as they try and strike a balance between boosting tax revenues without having an overly negative effect on the country's property market.

Lou may well be hoping that the focus on innovation at the upcoming G20 meeting will help to yield some more options, with Argentinian analyst Jorge Castro telling Chinese news agency Xinhua that finding new ways to get the global economy moving would be at the top of the agenda.

He told the news source: "The gathering in September of the G20 ... will show China's initiative in stressing innovation and the need to increase coordination to tackle a structural crisis that has led to the stagnation of the world economy."