The World Bank Group and the London-based world-leading accounting firm PwC jointly released the 13th edition of the Paying Taxes report in Beijing Tuesday, which reveals that China has been significantly alleviating the taxation burdens for Chinese companies over the past ten years or so, the Economic Daily reported.
The report, which investigates and compares tax regimes across 190 economies worldwide using a medium-sized domestic case study company, points out that China has been experiencing a very substantial reduction both in time to comply and payments, two of the four indicators used by the report, since 2004.
According to the report, in 2017, the time to comply, an indicator which reflects the number of hours it takes for the case study company to prepare, file and pay taxes of all kinds, was 142 hours in China, which marked a sharp reduction of 690 hours from 13 years ago.
Also last year, the case study company was able to pay up all its taxes in seven separate payments in China compared with as many as 37 payments in 2004, reflecting a huge progress in terms of the indicator of payments.
The report notes that this trend “has accelerated in recent years with the introduction of the Golden Tax III Project and a significant overhaul of the tax system, including the removal of the business tax and the digitalization of value-added tax (VAT) compliance.”
From the perspective of Peter Ng, Chinese mainland and Hong Kong tax leader, PwC China, the substantial reduction of corporate taxation burdens in China demonstrates the critical role of technology in improving the tax compliance procedures.
“Digitalization is now transforming the traditional tax compliance practices,” he said, adding that the adoption of technologies like the Internet and big data has been greatly improving the taxation environment in China.