Digital Yuan Now Being Used to Pay Taxes in Chinese Pilot Zones

Digital Yuan Now Being Used to Pay Taxes in Chinese Pilot Zones

Digital Yuan Now Being Used to Pay Taxes in Chinese Pilot Zones

Some Chinese citizens are now paying their taxes in the digital yuan, with the pilot gathering pace in the nation’s fast-growing pilot area. The move is part of China’s push to accelerate the use of its sovereign digital currency, which is currently being tested in four cities: Shenzhen, Suzhou, Chengdu and Xiongan.

According to reports Per Hangzhou.com, several government agencies operating in Zhejiang province are testing solutions that involve “the online transfer of digital yuan” to pay taxes. The pilot program is referred to as digital CNY tax payment solutions.

Last month, the Zhejiang Provincial Taxation Bureau of the State Administration of Taxation partnered with the Hangzhou branch of the central People’s Bank of China (PBoC) to “actively explore the development of digital yuan tax payment” solutions, with “several” real-world trials carried out in the province.

Since the start of April, a number of local tax bodies have allowed citizens to pay income tax, stamp duty, social security premiums, and fees using the digital CNY, per the report.

The Hangzhou taxation bureau became the first tax authority in China to accept digital yuan for payment in March. At the time, it was reported that a limited number of taxpayers were allowed to use the PBoC’s digital currency to pay taxes.

Other than taxes, the Zhejiang provincial government has also been paying subsidies to small businesses in the form of digital yuan.

In February, the Shenzhen municipal government gave away 10 million digital yuan ($1.5 million) to 50,000 citizens as part of a lottery. The city also handed out “red packets” containing digital CNY during the Lunar New Year holiday in January.

Major state-owned banks such as the Industrial and Commercial Bank of China, the Bank of Communications, and China Construction Bank have also been exploring “tax payment”-related business.

A Zhejiang Provincial Taxation Bureau official was keen to point out that the digital yuan was simply “a new payment method,” and not a replacement for cash and bank transfers,” adding that the token would “become an effective supplement to existing tax payment channels.”

But the official noted that the digital CNY “better supports online tax processing,” providing faster, remote tax payment confirmation.

Hangzhou is slated to host the Asian Games in September this year. Hangzhou and other hosting cities have been included in the pilot early to help prepare another international showcase for the PBoC’s new payment token.

Martin K
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I am a bitcoin and crypto currency writer. I also work as a professional trader, and I have experience with stock trading and bitcoin trading. In my work, I aim to provide clear and concise information that helps people understand these complex topics.