Chan Sze Wai: GBA's Tax Business Environment Optimizing with Strong Inter-city Policy Coordination

SFC Correspondent Zheng Wei, Yang Yulai, Wu Wanjie in Guangzhou

"The tax business environment in the Guangdong-Hong Kong-Macao Greater Bay Area continues to optimize, we see strong policy coordination among its cities," said Mr. Chan Sze Wai, Benjamin, Commissioner of Inland Revenue, Hong Kong, China, in an interview with SFC during the 6th Belt and Road lnitiative Tax Administration Cooperation Forum (BRITACOF). He noted that Hong Kong will strive to consolidate the advantages of its unique tax regime to serve as a dynamic gateway for international trade and investment, and act as a "super connector" and "super value-adder" in connecting the Chinese mainland and other Belt and Road jurisdictions.

The 6th BRITACOF was held in Kathmandu, Nepal on 9-11 September 2025. As a multilateral tax cooperation platform first proposed by China, it had 38 council members and 30 observers by the close of this year's forum, forming a tax cooperation network spanning five continents. At last year's forum, the Guangdong Provincial Tax Service, Shenzhen Municipal Tax Service, Hong Kong Inland Revenue Department and Macao Financial Services Bureau signed a memorandum of understanding (MOU) on tax co-operation within the Greater Bay Area. One year on, what concrete results have been delivered through this tax collaboration? We invited Mr.Chan to share the GBA’s tax-administration experience in serving the Belt and Road Initiative with the international community.

SFC Markets and Finance: How do you evaluate this year's Belt and Road Initiative Tax Administration Cooperation Forum?

Chan Sze Wai: The 6th BRITACOF has well served as an excellent platform for the exchange of knowledge and expertise in tax administration. The knowledge and insights gained from the Forum are invaluable to all of us in our endeavors to improve our tax systems and enhance the quality and capacity of our tax administrations, which are vital to economic development in our respective jurisdictions. The fruitful discussions among participants demonstrated a shared commitment to strengthening tax administration cooperation and collaboration. We have reached a consensus on deepening tax administration cooperation of the Belt and Road jurisdictions in the coming years and achieved significant outcomes that can serve as a foundation for future collaboration.

SFC Markets and Finance: How would you assess the current tax and business environment in the GBA?

Chan Sze Wai: The GBA's tax business environment continues to optimize, characterized by innovative tax administration practices that effectively support the Belt and Road Initiative. We see strong policy coordination among its cities, implementing various tax incentives to attract foreign investment and support high-tech enterprises. Special tax incentives have been introduced to support innovation, talent mobility and industrial development, such as subsidies for high-end talents and foreign investors. Areas like Qianhai, Hengqin and Nansha have implemented business-friendly tax policies, such as the tax subsidy for Hong Kong residents working or doing business there, which aims to foster cross-border development and attract talent and investment.

SFC Markets and Finance: What innovative tax-administration models have GBA tax authorities developed while serving the Belt and Road Initiative? And what specific explorations has Hong Kong contributed?

Chan Sze Wai: In the context of taxation, Hong Kong brings unique advantages to the Belt and Road Initiative. By implementing a simple tax system with various tax incentives for different businesses, we offer unmatched opportunities for our Belt and Road partners to connect and grow. We have also stepped up our efforts in expanding Hong Kong's network of double taxation agreements with a view to enhancing tax certainty for cross-border business activities and facilitating the resolution of cross-border tax disputes. In every endeavour, we strive to consolidate these advantages, ensuring that Hong Kong continues to serve as a dynamic gateway for international trade and investment, and a "super connector" and "super value-adder" in connecting the Chinese mainland and other Belt and Road jurisdictions.

SFC Markets and Finance: At present, the Hong Kong Inland Revenue Department is pressing ahead with a digital overhaul—rolling out e-filing, AI-assisted audit trials and more. How will these new technologies boost tax administration efficiency across the Greater Bay Area? And how can the GBA's experience feed into tax cooperation under the Belt and Road Initiative?

Chan Sze Wai: There are ample benefits that digitalization of tax services can provide to taxpayers and tax practitioners, such as minimizing possible manual errors in tax filing; achieving efficient filing of returns and documents anytime, anywhere; and reducing the turnaround time for signature or authorization arrangement. Taxpayers can thus save more staff resources for tax compliance and effectively deploy these resources to other business operations. For tax authorities, full-fledged digitalization will enhance the efficiency, reliability and accuracy of the collection of accounting and financial data from taxpayers. This will enable tax authorities to focus more on tax risk assessment and selection of high-risk cases for review or audit. Paper consumption will also be significantly reduced. In recent years, the GBA cities have achieved significant advancement in the digitalization of tax services. Such an achievement can serve as a good practice for other Belt and Road jurisdictions. Sharing insights on our digitalization journey can help improve tax administration efficiency for other Belt and Road jurisdictions. Looking forward, collaboration on digital tax administration among the GBA cities can contribute to the development of standardized tax processes and regulations within the GBA or even across Belt and Road jurisdictions, reducing compliance costs for businesses operating in multiple jurisdictions.

SFC Markets and Finance: One year on, what concrete results have Guangdong, Hong Kong, Macao and Shenzhen delivered through this closer tax collaboration? In which areas have the GBA's three distinct tax regimes now become mutually compatible and reinforcing? How do these breakthroughs ease cross-border investment along the Belt and Road?

Chan Sze Wai: After the signing of the memorandum of understanding on tax cooperation within the Guangdong-Hong Kong-Macao Greater Bay Area in September last year, the four tax authorities have enhanced tax administration cooperation and achieved fruitful outcomes. The first quadripartite meeting was held in Hengqin in December 2024. The tax services of Guangdong, Shenzhen, Hong Kong and Macao reached consensus on the following aspects at the meeting: First, establishment of an efficient liaison mechanism. Second, collaboration in taxpayer services. Third, coordination in tax administration. Fourth, provision of tax services for the development of the Belt and Road Initiative. And finally, reinforcement of capacity building. A publicity event on tax service was held in Guangzhou and Zhuhai on 11 April 2025. The event was co-hosted by the four tax authorities. During the event, the four tax authorities focused on the alignment of tax rules and mechanisms in the Guangdong-Hong Kong-Macao Greater Bay Area tax sector, jointly releasing 22 tax service measures covering six areas across three dimensions, namely "cross-border service efficiency improvement, smart tax upgrades, and targeted policy support".

SFC Markets and Finance: You previously noted in interviews that Hong Kong must keep its tax system simple, competitive and fair, while preserving the city's unique advantages and meeting international standards—a major challenge for the Inland Revenue Department. Looking ahead, what key initiatives and plans does the Hong Kong IRD have to deepen GBA tax cooperation and support the Belt and Road Initiative? How can tax administration reform and collaboration better serve the region's economic development?

Chan Sze Wai: The IRD and tax authorities of our fellow GBA cities will surely strengthen collaboration through more extensive engagement to streamline tax compliance processes and introduce more facilitating tax measures. Our four tax administrations will ride on the MOU platform to work more closely on collaboration in taxpayer services; coordination in tax administration; provision of tax services for the development of the Belt and Road Initiative; and capacity building. The IRD will continue to explore other digitalization options, such as the use of artificial intelligence and data analytics, to keep up with technological changes, in order to make tax compliance simpler and more efficient. Hong Kong currently has double taxation agreements with over 50 jurisdictions, helping reduce the double taxation exposure and enhance tax certainty for cross-border business activities. Double taxation agreements can also align with the Belt and Road Initiative, providing protection and facilitation for business cooperation between Hong Kong and the Belt and Road economies, and helping businesses in the GBA "go global" through Hong Kong. The Government of the Hong Kong SAR will continue to step up efforts to expand Hong Kong's DTA network, in particular with economies along the Belt and Road corridors. This would place both Hong Kong and our DTA partners in a more strategic position to foster economic ties globally and tap into new business opportunities.

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