Promotion of Accounting Informatization to Support Tax Administration

Ladies and gentlemen:

First,I would like to send my congratulations to the inauguration of the China Accounting Informatization Committee also XBRL China Jurisdiction on behalf of the State Administration of Taxation.

As a taxation officer, I feel familiar with accounting and accounting informatization. Information produced by accounting in the process of economic activities calculation and supervision takes up more than 70% of the whole economic information. The tax authorities hold belief in the information quality’s great influence on enterprises’ production, operation and survival, and even on a country’s economic decision. As we all know, the worldwide tax authorities commit themselves to rendering the collected tax reach the total theoretical tax amount as much as possible by true declaration forms submitted by taxpayers to the tax authorities. Accounting information, both the foundation of the tax declaration information and the major information resource for the tax authorities to enforce supervision and levy tax according to law, plays an important role in the above process. In the past 10 more years, the tax authorities have made achievements in income organization and economy regulation, which not only owes to rapid economic development and a series of measures in strengthening tax administration construction, but also attributes to the regulated accounting work, improved quality of and easier access to accounting information. I hereby would like to express my deep respect and profound gratitude to the related departments, including the Ministry of Finance, the Accounting Society of China and its Accounting Informatization Committee.

Early this year, the State Administration of Taxation and the China Banking Regulatory Commission, to enhance taxation monitoring and financial supervision, cooperated in mutual sharing of financial statement information in several pilot provinces and cities, which achieved initial progress. With regard to the pilots, the current accounting information quality is unsatisfactory, leaving large existing space for false accounting information. In addition, because of enterprises’ limited level of accounting informatization, their financial accounting information accessed by the government authorities is far from enough. At present, the State Administration of Taxation is busy with the preparation of the Golden Tax Project Phase III, which is the approved e-government construction project with the largest investment during the “11th 5-Year Plan” period. The project will realize the comprehensive tax informatization management by business restructuring and system upgrading. One of the important construction contents is to build a unified national corporate tax-related database and a third party tax-related database. In this way, the tax authorities can have a good command of the real-time, integrated and accurate tax-related information of taxpayers including the financial accounting information. The national integrated processing and analysis will optimize the tax resource monitoring and tax payment service, improving taxpayer’s compliance and rate of tax collection. However, the effort of the tax authorities can hardly afford the effective collection of the financial accounting information of more than 20 million legal person taxpayers, which yet calls for joint efforts made by all parties. Therefore, we attach much importance to and earnestly expect the progress in accounting informatization and the popularization in XBRL standardization.

The inauguration of the China Accounting Informatization Committee also XBRL China Jurisdiction, a hallmark of China's government to promote accounting informatization and XBRL standard formulation and implementation with greater determination and strength, will further improve the quality of accounting information, cut the cost of information exchange, reduce the growth space for false accounting information, and better support the tax administration, leading to the mutual promotion of tax and accounting informatization. The State Administration of Taxation and tax administrations at all levels will exert all their efforts to cooperate in the promotion work within their duties and responsibilities, contributing to the purification of the market economy environment and the construction of a harmonious society. Relevant authorities concerned and all parties are expected to pay more attention to the taxation work and the construction of the Golden Tax Project Phase III with greater assistance and support.

Thanks!