Publication Title

Peking University Journal of Legal Studies


Golden Tax Project, value-added taxation

Document Type



Unlike the United States, where sales tax is a common form of indirect tax, almost all countries around the world-both developed and developing alike-now impose a value added tax (VAT). In the early 1990s, as part of its comprehensive economic reform program initiated over 30 years ago, the People's Republic of China implemented a VAT. Monitoring compliance with VAT is a serious challenge in developing countries, and China is no exception in that regard.

To address this challenge, China launched a major fiscal reform project called the "Golden Tax Project" (GTP) which mandates the use of specific sophisticated information technologies to improve compliance with China's VAT laws. Although the Chinese GTP requires the use of information technology which can be considered as a form of "e-invoicing," the focus is on creating a centralized matching system under the control of the tax authorities to reduce the incidence of fraud.

In the EU, by contrast, the 2009 Report by the Expert Group on e-invoicing focused on strategies for increasing the voluntary adoption of e-invoicing technologies among taxpayers in order to make EU businesses more competitive. The Chinese policy requires stronger central controls than the EU policy, and includes stringent, new mandatory taxpayer duties, so it would not be suitable for use in developed economies with relatively high rates of voluntary compliance.

The Chinese GTP strategy might provide a useful model for other developing countries struggling with large-scale, widespread VAT compliance problems, however.



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