Issuance Date: August 22, 2016 Source: General Office of the State Administration of Taxation
Since the beginning of this year, tax authorities have broken new ground and taken bold steps to launch a series of service measures to offer more convenience to taxpayers, and provide new tax processing experience to them, by following the orientation of taxpayer demand, and making use of the "Internet +" and the key tax system reform like the rollout of the VAT pilot program to all sectors and supporting the key government strategies such as the Belt and Road Initiative.
Embracing the Internet to make breakthroughs
Along with the advancement of information technology, tax authorities have witnessed ever strengthening taxpayer services, but queuing, repeated submission and visiting many authorities for tax processing remain the pain points and obstacles for taxpayers and the difficulties in tax collection. Addressing them is what taxpayers expect and where tax authorities strive toward. Early this year, the State Administration of Taxation (SAT) launched 10 additional categories of 31 measures for more convenient taxation services, based on taxpayer demand, to build the "Internet + tax" brand, and give taxpayers access to convenient taxpayer services made possible by technology.
Fast services - tax authorities “on the cloud”. Guided by technical innovation, cloud-based taxation has become popular, giving taxpayers access to online tax processing, and supporting regional tax authorities to actively promote online processing of tax-related matters on the cloud.
"In the taxpayer service hall, invoicing usually takes 6-8 minutes if queuing is unnecessary and all documents are brought along. But online invoicing only takes 2 minutes and taxpayers can get the invoice directly from the counter." According to Jiang Xutao, chief economist at Shanghai Tax Bureau, the Golden Tax Phase III by local tax authorities enables online processing of common tax-related matters, saving taxpayers' time on tax processing. Xinjiang Urumqi Tianshan District State Tax Bureau was the first in Xinjiang to kick-start the joint online taxpayer service hall on July 1, where taxpayers only needs 4 minutes to complete the whole process ranging from filling out the application form to passing the approval.
Pragmatic services - taxpayer service hall on social media. Taxpayer service is not empty talk but emphasizes pragmatism.
"We are not eager to make it big, but to solve problems. Although WeChat public platform is a small part of our work, we are striving to make it special and let taxpayers feel our efforts to serve." According to Gu Jianfeng, director of Harbin Municipal Office, SAT, the Bureau has opened the public account Harbin Municipal Office on WeChat, and developed 15 functions such as WeChat queuing, reservation and invoice inquiry, in a bid to improve tax administration and optimize services through a "small medium".
In faraway Wuhan, Yang Dong issued an electronic general VAT invoice through his mobile phone. "Previously I had to go to the taxpayer service hall for invoicing, but now I could do it on my mobile phone. It is very easy to operate. You only need to upload the ID picture, and then make payment through WeChat or Alipay, and everything is done. It is pragmatic." Wuhan state and local tax authorities have jointly launched the "online invoicing platform" to issue electronic general VAT invoices and levy taxes through a mobile APP.
Economical services - service desk in your neighborhood. As tax authorities' business is regulated and standardized, and IT construction is enhanced, intra-province processing of tax-related business is made possible. Along with big data information connectivity, front-back office connectivity, and internal-external connectivity, and location constraints removed for processing of tax-related matters, taxpayers can visit nearby taxation windows to go through processing of outside businesses, which makes intercity tax processing as easy as intercity withdrawals.
The "intra-province processing of tax-related matters", initiated by Hainan Provincial Office, SAT, has been applied in Beijing, Shanghai, Shandong, etc. The expansion from intra-city or intra-county processing to intra-province processing enables data sharing and saves taxpayers from visiting to and fro various authorities. "Since Inner Mongolia has a vast expanse of land but poor traffic access, taxpayers have to spend several days on the train to visit a neighboring city. When doing business in other cities, I often have to be away from home for a month. The launch of intra-province tax processing service saves us time and cost." On hearing intra-zone processing in Inner Mongolia, accountant Wang, who lives in Hinggan League, became very excited.
Taking bold steps to ensure success of the VAT pilot program
Rolling out the VAT pilot program to all sectors has been the largest tax system reform in China since 1994, which means that business tax that has been levied for dozens of years would be totally replaced by VAT in about 2 months, with the information on more than 10 million enterprises verified one by one and handed over smoothly, and more than 10 million taxpayers to learn the new taxation process and taxation system, which is a tough challenge to taxpayer services.
"Smooth invoicing" to embrace the tax system transformation. VAT invoices play a decisive role in calculating and managing VAT, and smooth issuance of VAT invoices provides a solid foundation for the implementation of the VAT pilot program. Therefore, tax authorities made extensive preparations in the preliminary phase, including exchange of taxpayer information between state and local tax authorities, special taxpayer coaching, tax official training and filing period stress testing.
The rollout delivered a good start in May. The 12366 hotline received over 1 million inquiries, and taxation counters undertook an average of nearly 2 million transactions per day, processed handover with more than 10 million pilot taxpayers and organized training to more than 20 million taxpayers. In 12366 Jinan State Tax Call Center, for example, it received 2,188 inquiries over the phone on May 18, breaking the 15-year record.
"Smooth filing" was faced with tough challenges. The VAT taxpayers were to embrace the first tax declaration period in June and the declaration peak in July as taxpayers who file tax returns on a monthly basis, and small-sized taxpayers and financial institutions that file tax returns every quarter all needed to file tax returns in the month, while the transitional period of business tax invoices were to expire on June 30, hence putting tax authorities under double pressure from filing peak and invoice application. To relieve the pressure, tax authorities introduced 20 measures such as opening special windows for the first time in taxpayer service halls, providing one-window services with regard to state and local taxation, and investigating and cracking down on damages to taxpayers' interest by taking advantage of the pilot program, in a bid to enhance service efficiency and safeguard normal filing procedures.
To curb the trend that business owners raise prices on the excuse of the VAT pilot program, tax authorities worked with the development and reform authorities, and the industrial and commercial authorities to converse with enterprises that raised prices and require them to organize self-checks and actively rectify their conduct. The price competent authorities in Beijing, Shanghai and Liaoning imposed administrative penalties of RMB 2 million on each of the 6 enterprises who hiked prices on the excuse of the program, including Crowne Plaza Beijing Sun Palace, in an effort to maintain the market price order that supports fair competition and ensure smooth implementation of the VAT pilot program.
"In-depth analysis" to deliver on reform commitment. "Smooth invoicing and filing" gave taxpayers a sense of gain from convenient taxpayer services, while "in-depth analysis", the top priority of the pilot program, is to let taxpayers have a stronger sense of gain from the dividends of reform. To this end, tax authorities introduced 20 new measures including analysis of the progress of the VAT pilot program, analysis of the tax burdens on pilot industries, and analysis of the effect of the pilot program, in an attempt to help enterprises enhance the level of governance and ensure efficient in-depth analysis for the pilot program by focusing on analysis and providing precise services.
For example, an official at Guangxi Zhuang Autonomous Region Office, SAT spent one week on understanding more than 30 items of operating income in 3 categories of Sealand Securities Co., Ltd., analyzing the input sources of 74 VAT items one after another, and streamlining 16 expense items that impacted tax burdens, thereby reducing tax burdens on the company.
Pushing forward collaboration and joint governance to open up a new chapter for taxpayer services
It is China's key tasks that are of great strategic significance in 2016 to press ahead with the Belt and Road Initiative, implement the Outline of the Plan for Coordinated Development in the Beijing-Tianjin-Hebei Region and accelerate the development of the Yangtze River Economic Belt. The regions involved in the three strategies are the powerhouses that guide China's economic development and the testing regions for the enhancement of the level of taxpayer services. Tax authorities have introduced a legion of customized innovative measures and developed a group of reproducible and promotable experience, vigorously boosting the innovation of taxpayer services.
Taxation plays a role as a facilitator to the Belt and Road Initiative. Along with the implementation of the Belt and Road Initiative, going global has become inevitable for the development of enterprises. But how to go global has baffled the enterprises. Without understanding of the tax treaties or conventions and tax laws of the host country, and poorly aware of protecting their rights, enterprises going global are usually faced with multiple tax-related risks, and some even are cheated. In such cases, taxpayer services must be updated to ensure enterprises go global smoothly and into faraway countries and regions.
The tax system, taking building new international taxation relationship as its mission, goes all out to serve the Belt and Road Initiative and expands the scope of tax treaties or conventions, signing agreements against double taxation and 10 information exchange agreements with 105 countries and regions. It has created special seats for the 12366 taxpayer service hotline, and compiled investment taxation guidelines, to help enterprises understand the tax system and policies in the countries along the Belt and Road. China will actively make its voices heard, provide its schemes and present its wisdom in cooperation with the countries along the Belt and Road in tax matters.
"Green channel of taxation" has been created in the Beijing-Tianjin-Hebei Region. The tax revenues collected in Beijing, Tianjin and Hebei combined are high but uneven internally, with problems such as big structural differences between tax sources. The series of cooperation frameworks and agreements published by tax authorities have played a significant role in boosting coordinated development in the region, such as building a common online taxation platform for Beijing, Tianjin and Hebei, and continuity of taxpayers in the region to retain its tax credit and enjoy tax preferential treatment in the new place of business it relocates to from the original place of business, where it does not need to clear taxes before relocation.
"Taxpayers that migrate into Beijing from other province have access to original tax preferential treatment by presenting the inter-province migration procedures. Those headquartered in Beijing but having branches in Hebei have equal access to tax preferential treatment by presenting the tax registration certificate, tax return filing forms and qualification recognition procedures of its Beijing store." According to Wang Manping, director of Hebei Provincial Office, SAT, the new policy can reduce the scramble for tax sources between regions, and cut cross-regional migration costs, enabling enterprises to flow efficiently from one place to another.
Cross-regional collaboration is promoted in the Pan-Yangtze River Delta. Along with the implementation of the development strategy of the Yangtze River Economic Belt, a growing number of enterprises have achieved significant progress. But as cross-regional migration and operation becomes a normal, problems such as heavy costs of cross-regional tax processing and constraints of regional policies have emerged. In January, the tax information sharing platform was kick-started in the Belt and became a key carrier for cross-regional collaboration for tax collection, which features multiple tiers, broad coverage, cross regions, and multiple forms, and gives taxpayers access to cross-regional taxpayer services.
"It is no easy job to move a house, let alone relocation of an enterprise." According to Lu Ziqiang, director of Guizhou Provincial Office, SAT, enterprise that applies for and purchases invoices in the place of origin every month is allowed to continue to apply for invoices in the amount equivalent to the original amount in the host place through tax information sharing, mutual recognition of qualification, and mutual help in tax administration, which enables the enterprise to carry out productive and operating activities at the new address as early as possible. With this platform, tax authorities in the Pan-Yangtze River Delta regularly uploads the information on issuance, cancellation, validation and verification of the local Taxation Management Certificate for Inter-City Operating Activities for information sharing in the region, hence laying a solid foundation for better taxpayer services by regional tax authorities.
Just as we need reform every now and then, so we need services. According to Wang Jun, SAT administrator, deepening reform raises higher requirements on the level of taxpayer services, and the national taxation system will bear in mind their purposes and forge ahead to help taxpayers enjoy the dividends of reform and serve the economic and social development better by streamlining administration, delegating powers, simplifying processes, enhancing tax collection and innovating services.