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VAT Reform in China: Can New Zealand’s Goods and services tax Provide helpful Guidance?

Journal of Chinese Tax and Policy

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Title VAT Reform in China: Can New Zealand’s Goods and services tax Provide helpful Guidance?
 
Creator Adrian, SAWYER
 
Description Value Added Taxes (VATs or Goods and Services Taxes - GSTs) are beingincreasingly adopted globally, with VAT/GST revenues similarly increasing through highercontributions from indirect taxation to total tax revenues. Unsurprisingly, increased focus isbeing placed on the design of such taxes, encompassing policy choices and legislative draftingstyles. New Zealand’s (NZ’s) GST, introduced in 1986, is held up as the ‘model’ VAT in apost-European VAT environment, especially when measured against the key tax principles ofefficiency and simplicity. Importantly, the trade-off has been less equity within the tax itself,which necessitates forms of compensation elsewhere in the tax system. The vast majority ofGSTs developed since 1986 have used the NZ GST model as a starting point, although nosubsequent GST/VAT has been as ‘pure’ as the NZ model. A number of factors have beeninfluential in resulting VAT/GSTs. This includes: the actual design, prevailing tax policyprocess; general economic environment; and jurisdictional political philosophies (at the timethe VAT/GST is promulgated and implemented). Of particular importance in NZ is the GenericTax Policy Process (GTPP) which encourages both early and widespread consultation over taxpolicy design and draft legislation.This paper seeks to provide an overview of NZ’s GST (including the core concepts within theGTPP) as a case study for evaluation as a possible ‘initial model’ for adaptation in China as itseeks to reform its VAT. Through building on prior work reviewing the Hong Kong SpecialAdministrative Region’s (the HKSAR’s) GST experience and policy development framework,this paper offers insights into why the author believes the NZ GST experience should be ofboth interest and relevance to the People’s Republic of China (the PRC). This is premised onthe basis that NZ’s GST has been endorsed in subsequent tax system reviews, and survivednotwithstanding major changes in the NZ political environment and prevailing economicconditions.☆
 
Publisher Journal of Chinese Tax and Policy
 
Contributor —
 
Date 2018-05-22
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
—
 
Identifier https://openjournals.library.sydney.edu.au/index.php/JCTP/article/view/12738
 
Source Journal of Chinese Tax and Policy; Vol 4, No 2 (2014): Chinese Tax and Policy 7
1839-065X
2205-2550
 
Language EN
 
Rights Copyright (c) 2018 SAWYER Adrian