China (Chongqing) Pilot Free Trade Zone Made Institutional Innovation

The new model of "cross-provincial tax payment into the treasury by electronic means" was jointly launched by Sichuan's and Chongqing's tax systems. The State Taxation Administration and the Head Office of the People's Bank of China promote it across China.

The new model of "cross-provincial tax payment into the treasury by electronic means" was jointly launched by Sichuan's and Chongqing's tax systems. The State Taxation Administration and the Head Office of the People's Bank of China are promoting it across the nation. (iChongqing file photo)

With the mode of "cross-provincial tax payment into the treasury by electronic means," taxpayers in Sichuan and Chongqing who engage in cross-provincial businesses can pay tax via any bank opened by an enterprise at the place of business accounting in Sichuan and Chongqing directly into the treasury within only one day.

It is an innovative model launched by Chongqing's and Sichuan's taxation systems in conjunction with Chongqing Business Management Department and Chengdu Branch of the People's Bank of China under the framework of building Chengdu-Chongqing economic circle.

"Innovating taxation services has always been an important part of institutional innovation of China (Chongqing) Pilot Free Trade Zone," said a competent official from Chongqing Municipal Commission of Commerce.

The pilot free trade zone (FTZ) has focused on reducing tax payment time, optimizing payment procedures, and decreasing tax and fee burdens to explore fair and inclusive tax facilitation reform. "Cross-provincial tax payment into the treasury by electronic means" is right a prime example.

Promote multiple measures across the nation

Driven by the pilot FTZ, Chongqing has promoted lots of measures on convenient tax and fee payment across the nation in addition to the "cross-provincial tax payment into the treasury by electronic means."

For example, "Tax Declaration Upon Click," an auxiliary tax declaration feature introduced by Chongqing for small-scale value-added taxation, can allow more than 90% of taxpayers to complete tax declaration within a minute, cutting the tax declaration time by more than 80%. This feature has been promoted nationwide by the State Council as a typical case.

Another example, Chongqing took the lead in the country in piloting the reform of combining property and behavior taxes for tax declaration, which has greatly decreased the manual tax declaration and calculation time for taxpayers and avoided the situations of failing to declare or wrongly declaring some taxes.

As of May 12, 2021, Chongqing had finished 491,000 tax declarations for combined property and behavior taxes in total.

The system for a tax refund from the treasury by electronic means is also a good example.

Jointly developed by Chongqing Municipal Tax Service of the State Taxation Administration and Chongqing Business Management Department of the People's Bank of China, the system can realize paperless application, electronic process, intelligent review, and standardized business, reducing the time for handling tax refund by about ten days on average.

As an experimental field for policy innovation, the pilot FTZ plays a leading and exploratory role and provides experience and practice that can be replicated and promoted for Chongqing's and even national development.

To this end, the pilot FTZ has been highlighting institutional innovation. As of the end of 2020, it had cultivated 79 innovation results. Six reform pilot experiences and best practice cases were replicated and promoted nationwide by the State Council.

In addition, "self-filing, self-determined write-off cycle, self-verification, self-reporting of overdue tax and simplifying business approval procedures" for special customs supervision zones was commended by the State Council as a typical example of business environment improvement.

In terms of task implementation, all the 151 reform pilot tasks set in the overall plan of the pilot FTZ have been implemented, and 92.3% of 234 nationally replicable and promotable pieces of reform pilot experience and best practice cases are suitable for Chongqing were implemented in the city.

Meanwhile, 56 pieces of experience and measures developed by Chongqing were replicated and promoted across the city.