2018 may be ‘year of global tax reform’
Trump’s tax reform will exert great influence on global economy and the year 2018 may be the ‘year of global tax reform’, an expert told Xinhuanet recently. US Congress passed a tax reform act on December 20, 2017, the largest since 1986. The bill was signed by President Trump two days later and takes effect from January 2018.
The US tax reform may lead to a worldwide tax reform, said Chen Fengying, researcher at China Institute of Contemporary International Relations.
Global tax reform will stimulate a new round of investment and consumption, which is conducive to the sluggish world economy, she said.
In the meanwhile, capital will flow to developed countries as they begin to cut tax. Consequently, there might be a lack of capital flow in some developing countries and emerging economies.
However, there is no need to worry about capital outflow from the Chinese market, said Chen.
“China is among the first in terms of economic transition. Recent years have witnessed great advancements in the field of technology, which has great investment potentials,” Chen said.
With the growth of investment and consumption, Chinese exports will be benefited, she added.
She also predicted that China will enhance its investment environment by accelerating tax reforms. Global tax reform will create an opportunity for China to push its currency renminbi to go global and increase investment in countries along the Belt and Road, she noted.