China urged to address global digital tax rules to avoid ‘new tariff war’ as G20 push for July consensus



Orange Wang | South China Morning Post

China needs to avoid the potential of a “new tariff war” and play a more active role in how taxes are applied to the digital economy, warned the former head of its central bank, in response to a new US government proposal that could allow for major economies to agree on uniform tax rules for digital firms.

China has not yet paid enough attention to the issue of taxation of digital goods and services, which has risen to become an important item on the international agenda, according to Zhou Xiaochuan, who served as the governor of the People’s Bank of China (PBOC) for over 15 years.

“A clear starting point of concern over this issue is that [various countries] should avoid falling into fights with each other over the digital tax, especially about whose wallet the money raised from the digital tax belongs to,” Zhou said at the Boao Forum for Asia on Wednesday.

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