Three Hengqin measures are listed among the best institutional innovation cases of the three-zone Guangdong Pilot Free Trade Zone (GDFTZ) in 2021. They address the automatic approval of tax-related businesses, integrated closed-loop cross-border tax and fee services, and cross-border financial services.

The announcement was made at an Aug 18 press conference of the People's Government of Guangdong Province concerning the GDFTZ, which currently comprises Hengqin area of Zhuhai, Nansha area of Guangzhou, and Qianhai & Shekou area of Shenzhen.

The Hengqin innovative measures transform government services that further open Hong Kong and Macao service sectors for a free flow of factors with Guangdong.

For instance, the digital approval rule model with indicators for taxation credit grade, violation penalty, and tax declaration has been established in the Hengqin zone. Frequently handled businesses such as verification and approval of invoices and corporate income tax refunds are now processed automatically.

At present, more than 80 percent of the work at grassroot-level taxation branches is handled by robots, enabling instant approval of electronic whole-process taxation services.

The fully automatic-processing system solves the problems of large calculation volume, high error rate, heavy or repetitive operation, and waste of workforce in the traditional approval mode, thereby improving the quality of taxation services.

Hengqin launches country's first V-Tax system which allows Hong Kong and Macao taxpayers to independently use remote officers [Photo courtesy Zhuhai Daily]

To provide financial support for small and medium enterprises, regular checks and automatic verifications are carried out by the electronic taxation platform for timely tax deductions and rebates.

Hengqin took the lead in the country to realize a new integrated closed-loop service system for whole-process cross-border taxation issues covering declaration (including social security insurance issues), payment, and refund. A new pattern of cross-border tax services is connected online and offline.

V-Tax remote tax processing has been adopted in 54 outlets in Macao. Ten Zhuhai social security matters related to pension and medical insurance can be handled on-site for Macao residents and migrant workers there. Besides, the innovative use of UnionPay cards realized cross-border tax payments and refunds as well as cross-border real-time payment of social security insurance fees.

This helps non-resident taxpayers make oversea tax payments. In 2021, more than 20 million yuan ($3 million) in taxes was paid online from overseas through UnionPay. Also processed was 16 million yuan ($2.3 million) of cross-border bank inquiries, benefiting 110,000 Hong Kong and Macao residents living in Zhuhai and 140,000 mainland workers in Macao.

The Industrial & Commercial Bank of China (ICBC) Hengqin-Macao Link, a service brand tailored for the Guangdong-Macao In-Depth Cooperation Zone in Hengqin by ICBC Guangdong, provides 12 services for cross-border finance between Hengqin and Macao. They span commercial affair, estate, social security insurance, consumption, and fiscal management. This promotes the moderate diversification of Macao economy of and facilitates the life and work of Macao residents.

As of January this year, 17,000 accounts had been opened via ICBC's cross-border financial services with a transaction amount of 297 million yuan ($44 million). Loans for cross-border property purchases totaled MOP 3.21 billion (2.7 billion yuan, $397 million). In addition, more than 12,000 Macao residents applied for Zhuhai social security insurance accounts and cards in Macao using ICBC branches in the two regions.

Furthermore, ICBC Guangdong has recorded 15.9 billion yuan ($2.3 billion) of account financing businesses and 2.4 billion yuan ($352 million) of trade-related risk participation businesses. Its branches in Hengqin and Macao have jointly organized a cross-border syndicated loan of 2 billion yuan ($294 million) and launched a 14-billion-yuan ($2-billion) ICBC-China Railway Construction QFLP fund.