Tax cooperation can help B&R achieve aspiration

Note: Wang Yiwei, senior fellow of Chongyang Institute for Financial Studies, Renmin University of China, wrote an article named Tax cooperation can help B&R achieve aspiration which was published by Global Times on May 28. The following is the full text of this article.

Tax cooperation related to the Belt and Road (B&R) initiative has entered a new era. A conference related to B&R tax cooperation, recently held in Astana, capital of Kazakhstan, created a framework for establishing long-term mechanisms for tax cooperation. This will have a positive impact on the construction of a global economic governance system.

Setting up such a mechanism was always an important issue facing the B&R initiative, due to great differences in market conditions of the countries and regions involved.

For example, there are two sets of systems in Mauritius: the civil law is from France, while the criminal law is based on the system of the UK. In situations like this, the taxation and accounting systems are often not compatible with either the Western or Chinese systems, and creating tax cooperation mechanisms always presents difficulties.

We can promote the construction of B&R-related tax cooperation in various ways: the connection of international rules, the formation of a totally new system and the establishment of typical enterprise model.

The tax cooperation mechanism can interconnect with the existing accounting standards in each market. In some cases, countries have already decided to follow some international accounting standards. In such cases, the two sides can make efforts in specific areas.

At the same time, the important role that financial centers like Hong Kong - with advanced accounting, finance, legal, consulting and insurance services - can play, can`t be ignored. These cities can be bridges between China and the English-speaking world, and they can also link China with the US and other developed countries.

These cities will coordinate and serve the B&R initiative, and they can also achieve a second take-off through this role.

Based on specific accounting rules, we will gradually create a set of accounting systems that represent the largest common denominator of each country. The so-called globalization of the past was actually a legalization of the colonization of the European world. It later evolved into a capital-driven, US-centered globalization. These are not true examples of global integration. (Contributed by Zhao Danliang, Danliang67@xinhua.org, edited by Zhang Aifang, zhangaf@xinhua.org)