Building Tax Capacity in Developing Countries

Building tax capacity is central to the role of government in achieving the sustainable development goals,addressing climate change,and ensuring debt sustainability.Despite progress in revenue mobilization,there is still a large unmet tax potential in low-income developing countries.Increasing tax capacity requires a firm commitment to building institutions that govern the tax system and manage tax reform,and to improving the design of core taxes.To enhance understanding,this article provides a synopsis of why improving tax capacity is important and contains insights on trends in revenue mobilization,how to strengthen tax policy and the role of supporting institutions.Furthermore,it explores the importance of a sound legal framework for tax certainty,which plays a crucial role in shaping investment choices and can significantly affect economic growth.

Reducing the Tax Burden?Opportunity to Craft a Balanced Approach under Pillar Two

The global minimum tax impacts the effectiveness of tax incentives.Many countries view tax burden reduction as a necessary lever to promote foreign direct investment(FDI)and economic growth.In this article,the authors provide a broader perspective.The proposed holistic approach may offer insights to lowincome and emerging countries in facing current challenges in the sphere of taxation and economic growth.

Generative AI:The Power Behind Large Language Models and Its Use in Tax Administration

This article examines the potential of Generative Al to transform the operation of tax systems and the potential barriers that will have to be overcome.It is intended to start a conversation amongst BRI tax administrations on the areas where Al could have the greatest impact on taxpayer service and compliance.

Promoting the High-Quality Development of the Belt and Road:A Taxation Perspective

This article sets out the evolution journey of trade and investment since globalization,the relationship between foreign direct investment and gross do-mestic product growth,revisits the utilization of tax incentives in the past,explores the tax incentives for the post-pandemic recovery period in 2023,and provides some thoughts on how the BRITACOM platform may support high-quality growth.

Improving Tax Services and Optimising the Business Environment:Insights from the Experience of Hong Kong SAR,China

To keep pace with the global trend of digital transformation,the Inland Revenue Department of Hong Kong SAR,China(HKIRD)has embarked on its digital transformation journey to upgrade its information technology(IT)infrastructure and pave the way for full adoption of electronic filing(e-filing)of profits tax returns for businesses(the e-filing project).The e-filing project was implemented in phases starting from June 2020 and expects full implementation by June 2025.The first phase of the digital transformation was successfully implemented earlier this year allowing more businesses to voluntarily e-file their profits tax returns.This article discusses the motivations behind the HKIRD’s e-filing project,the implementation process as well as its implications for Hong Kong SAR,China.Digital transformation is an inevitable development in the society and commerce.To keep pace with the global trend of digital transformation,the public sectors in various jurisdictions have been digitalising financial and tax reporting over the past decades to harness IT to improve delivery of public services to customers and enhance the standard of information collection and administration.

Promoting Economic Recovery Through Taxation

The role of taxation in promoting economic recovery has attracted great-er attention in recent years,with economic dislocation following the Global Financial Crisis and the COVID-19 pandemic.While taxation is only one of the factors impacting economic recovery,both economic literature and practical experience show that tax policy can contribute to enhanced growth and therefore greater economic activity.Tax instruments used as a means for promoting economic recovery include tax holidays,preferential tax rates,investment allowances,tax credits and special economic zones.However,there are a range of constraints over tax incentive design imposed by bodies such as the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting,the Forum on Harmful Tax Practices of the OECD and the Code of Conduct on Business Taxation of the European Union.Given the above,this paper sets out practical issues to inform governments seeking to promote economic activity through taxation.

Enhancing Tax Administration Capacity

The COVID-19 pandemic has shown us the societal importance of tax administration service delivery capacities and agility.Tax administration capacity is a key factor for nurturing both societal resilience and domestic resource mobilisation.Tax administrations around the globe are implementing new digital technologies to enhance taxpayer service quality,reduce operational and compliance burdens and increase revenues.In addition to the ongoing incremental improvement of the core tax administration functions,there are also increasing signs of transformation towards a more fundamental change in the nature of tax administration.This concerns a more system-wide compliance management approach in which tax administrations try to closely engage with the natural systems that taxpayers use to manage their business,engage in transactions and communicate in order to reduce errors,minimise burdens and increasingly build tax compliance.This paper explores the way in which tax administrations are enhancing the capacity of core functions and are preparing for a more holistic compliance management approach,including using an increasing amount of digital data sources facilitated by the introduction of new digital innovations.

China's Tax Reforms in Facilitating Globalization and the Belt and Road Initiative

Since the proposal of the Belt and Road Initiative(BRI)in 2013,the economic and trade cooperation between China and related BRI economies has flourished over the past eight years.The Chinese government has given top priority to improving its doing-business environment to implement the national initiative of"bringing in"and"going abroad",which echoes the BRI economic activities.Being a core part of the doing-business environment,tax reforms and the building of a more growth-friendly tax environment serve as one of the key drivers to further attract foreign investment and encourage domestic enterprises to go abroad.This article starts with the background of China’s tax reforms,followed by an in-depth analysis of the corporate income tax and individual income tax reforms,and finally discusses the impacts of China’s tax reforms on cross-border investment and trade.

Finding Opportunity in Adversity:Tax-focused COVID-19 Support in BRITACOM Members

In this article,we show that,in common with the 2008-2009 global financial crisis,tax administration is already playing and will continue to play an important role in securing a safe and expeditious exit from the COVID-19 crisis,and the lessons learned from globally are crucial for the Belt and Road Initiative(BRI)crisis response.We look at the types of measures being utilized both globally and by BRITACOM Members’governments,the added burden being placed on tax administrators as a result of the need to oversee new programs and change existing ones,and the potential longer-term effects on tax administration as the world learns to live in what may need to be a"new normal".We conclude that there is an opportunity to use this experience to"build better"as we look beyond the support phase and to the future of tax administration.

BRITACOM and the Digitalization of Tax Administration

This article looks at how enhanced digitalization of tax administration can raise both taxpayer service and enforcement effectiveness and address potential bottlenecks and barriers to BRI trade and investment.The article also draws on the extensive experiences from BRI jurisdictions and elsewhere in the world,points to potential learning points for BRI tax administrations.

The Potential of Blockchain to Transform Tax Systems in BRI Jurisdictions

This short article sets out how technology is able to help resolve some of the basic problems that have plagued Belt and Road Initiative economies over many decades,namely:how to assist companies to take advantage of global markets;how to move away from a cash-based economy to a cashless economy;and how to deal with the growing volume of illicit financial flows.These technologies will transform the tax administrations of BRI jurisdictions over time.

Major Changes in Tax System and Administration on Cross-border Trade and Investment in Myanmar

This article presents the efforts of Myanmar Internal Revenue Department to change the tax system from an office assessment system(OAS)to a self-assessment system(SAS)to achieve a fair and efficient tax system and to improve taxpayers’compliance through the impact of tax reform on cross-border trade and investment.

Tax Incentives:Tax Revenue versus GDP in Malaysia

Malaysia has a set of"blessed advantages"over other members of ASEAN in terms of fiscal incentives,environmental perspectives and established infrastructures.MNEs are welcome to invest in Malaysia as they could generate substantial income at the expense of significant tax benefits,compared with local companies.The proceeds of business can be diversified into venture capitals and private equities,earning sustainable investment returns and large capital gains upon realisation.Despite tax forgone,Malaysia continues furthering tax incentives to attract FDI.

Tax Policies and Measures to Tackle the Impact of COVID-19 in BRI Jurisdictions and Related Challenges

The COVID-19 pandemic has presented significant challenges to businesses and households around the globe.In response to the outbreak of the pandemic,governments are using tax policies and tax administrative measures to alleviate corporates and individuals from cash flow pressures.This article summarizes the tax policy measures taken by a few BRI jurisdictions,provides an overview of the cross-border issues arising from exceptional and temporary work location changes due to the pandemic and briefly discusses the challenges faced by governments and corporates and how tax can play a role to deal with these challenges.

On the Road Towards a Competitive Tax System:Hungarian Perspective

Following the 2008 economic crisis,Hungary introduced a series of growth-oriented tax changes.These changes were rooted in the"taxation and growth"literature of the 2000s.Measures included large cuts in direct taxes on labour and profits,consumption tax increases and significant measures to combat the shadow economy.At the same time,the priority of international tax policy discussions shifted more towards equity concerns,which led to a new OECD initiative on a global minimum corporate income tax(GloBE).The compromise proposal leaves a limited space for tax policy measures aiming to neutralize distortions associated with corporate income tax and to promote capital accumulation and productivity,but some room will remain.

Enhancing Tax Administration Capacity Building

This article tracks how OECD capacity building has evolved since 1992,alongside the evolution of international taxation,tax administrations,and their needs for support.In doing so it identifies some of the key lessons for tax administrations and their partners in building the capacity to respond to the current challenges and opportunities.It places a particular focus on digitalisation and the implications for tax administrations,both in respect to the implementation of the Two-Pillar Solution to the taxation of the digitalising economy,and digitalisation of the tax administration itself.

Positive Roles of China's Preferential Tax & Fee Policies for Epidemic Control and Socio-economic Development

Since the outbreak of the COVID-19,Chinese President Xi Jinping has de-livered keynote speeches as well as a s eries of remarks and instructions on efforts coordinating COVID-19 prevention and control with socio-economic development,and has also made overall deployments to secure decisive victories in fighting against the epidemic and poverty,and in building a moderately well-off society in all aspects.

New Technologies and Transfer Pricing in the BRI Jurisdictions

This paper explores the linkage between emerging new technologies and transfer pricing,and the mechanisms available to minimise and resolve disputes in this area.It explores the way that these technologies can help achieve a better application of the Arm’s Length Principle(ALP)which remains the bedrock for transfer pricing around the world.It also identifies the way that both MNEs and Tax Administrations can use these technologies to get access to more comparable information and to achieve greater consistency in the allocation on the basis of the ALP.Finally some new ways of achieving more effective cross-border resolution mechanisms in the BRI jurisdictions are explored.