Reflections on the Tax Disclosure System Triggered by Investment and Tax Planning by China's High Net Worth Individuals
Abstract
As China’s macroeconomic situation has continually improved, China's private wealth market has also steadily expanded. According to the Hurun Research Institute, investment assets owned by wealthy Chinese households account for about thirty percent of total asset wealth. This wealth continues to grow by as much as ten percent annually. Since there has also been a significant demand for tax planning from wealthy Chinese households, we must pay attention to tax planning, possible tax avoidance and the importance of tax disclosure. At the same time, tax disclosures appear to be becoming more significant, as tax authorities seek to ensure that tax planning complies with the requirements of tax regulation. In this paper, we will discuss if it is possible to reduce the criminal behaviour associated with and the inefficiency and inequity of taxation through inadequate tax disclosure. With adequate tax disclosure, inefficiency and inequity in taxation can be resolved.