03/06/20

ASIA: Hainan should not become a 'haven for tax evasion', warn Chinese officials.

As published on tass.com, Tuesday 2 June, 2020.

HAIKOU, June 2. /TASS/. Hainan's free trade zone and port should attract foreign investors with constantly improving business conditions, but the island cannot be allowed to become a popular place for tax evasion, stated the head of the Chinese State Committee for Development and Reform He Liefeng.

"Thanks to the creation of an effective fiscal system that will meet the interests of the Hainan Free Trade Port, its attractiveness in the international trade and economic sphere will increase, the objective factors that determine the competitiveness of this special economic zone will be strengthened," the official said in an article published on en.people.cn. “We need to carry out transformations in the spirit of the reforms being carried out in our country, strive to simplify the local tax system. <...> At the same time, we must not allow undermining the tax base and fraud on the transfer of profits. It is necessary to prevent Hainan from becoming to a haven for tax evasion"

According to He Lifeng, the Chinese authorities will actively contribute to lowering duties and duties on imported goods in the region to zero. “We also need to gradually optimize measures regarding the collection of income and individual taxes,” said the top official.

He recalled that the formation of Hainan's free trade zone is an important task for which the government will need to make its utmost to create a comprehensive system of mutually beneficial economic relations for quite some time.

“We should combine such advantages as environmental friendliness and openness, actively introduce advanced technologies, attract highly qualified specialists, borrow experience in innovative development, so that there are the best production conditions in the world on the Island of Hainan: this applies to both capital and intellectual property, as well as information, technological and managerial methods," said the head of the committee.

On Monday, the Central Committee of the Chinese Communist Party and the State Council published the "General Program for the Establishment of a free port on Hainan," according to which the authorities plan to form an effective mechanism on the island by 2025 to carry out a number of important development tasks, and within 10 years — to decisively enhance the new system of this special economic zone.