A New mechanism aimed at creating a more favourable tax environment for enterprises and countries involved in China’s Belt and Road Initiative (BRI) has been established.
Tax officials and experts from dozens of countries and international organisations have gathered in China from April 18 to 20 for the first Belt and Road Initiative Tax Administration Cooperation Forum, known as BRITACOM.
It comes as trade and investment continue to grow among participants in the initiative. Last year, Chinese companies’ non-financial direct investment in Belt and Road countries saw a near nine-percent increase year on year.
Liao Tizhong from China’s tax authority has been involved in the mechanism since the very beginning. “In the past years, companies and business realise that tax is a very important parameter here.
As they consider more about after-tax returns, they come to us saying that we need to do something together,” said Liao Tizhong, director general at International Taxation Department, State Taxation Administration of China.
Fairness and taxation capacity building were said to be the main talking points from the three-day forum.
“The key issue is for all countries to play on a level field developing countries, tax needs to be increased. The other thing is within the BRI, particularly for developing countries, not only they need to get the investment, but also the tax revenues, which need to be increased,” said Professor Jeffrey Owens at Global Tax Policy Center, Vienna University of Economics and Business.
The forum also rolled out action plans to clear out cross-border tax barriers such as double taxation. Thirty-four tax authorities including Nigeria have signed up to the mechanism, while another 11 have become observers.
“BRITACOM could help simplify our tax laws and facilitate the investment. Nigeria will be able to see, look, this is our benefit, because we need to attract foreign investment to grow our economy such as the Chinese companies,” said Ike Odume, director at Federal Inland Revenue Service of Nigeria.
East China’s water town of Wuzhen was chosen as the venue for the first ever BRITACOM forum. And this historical town also plays host to the annual World Internet Conference, which showcases the continuing innovation and openness of a modern China. But this is just the beginning for BRITACOM.
Next year, the forum will be held in Kazakhstan, where more specific details on the mechanism will be ironed out.