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September 30, 2016

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WTS China upbeat about mainland tax service market

Source: Shanghai Daily | September 30, 2016, Friday | Print Edition

WTS China offers focused, in-depth tax consulting services. Shanghai Daily interviewed Martin Ng, managing partner of WTS China to learn about the company’s business in China and his view on China’s tax service industry.

Q: Financial and tax consulting services tend to give people the impression of being “conservative” but your firm tries to provide clients with innovative solutions. Could you tell us in detail about your service innovation?

There is nothing wrong about being conservative, which in a sense suggests sustainability. We are conservative in helping our clients to control risks but innovative in our operation. Innovation is not a catchword but a vital means of survival for all businesses. Tax consultancy is no exception.

Tax consulting is a time-sensitive business. It is crucial to save the time cost both for us and for our clients. To achieve that, we need technology to perform a supplementary role in tax consulting. 

A typical example of our innovation happens in the area of identifying and controlling tax and financial risks. We use cloud-based technology to let clients participate anytime and anywhere they like during the process of our operation. This can effectively shorten the time of data sharing and retrieval and let us focus on data analysis and value creation. In other words, process enhancement is a kind of innovation.

  

Q: As you mentioned, WTS Global is a network of firms in more than 100 countries, but your primary business is applied locally because each country or region has its own legal and taxation systems or practices. How do you cope with the situation?

Yes, it is true that we have to apply local knowledge in our practice, but we interact a lot with our overseas colleagues. Consultancy is about serving clients with due expertise and experience, for the objective of growing business in a healthy manner.

We insist on using localized expertise to serve our clients within professional specialty and jurisdiction. We advocate multi-skills within the boundary of specialty but we do not foster the know-it-all culture. A responsible advisor should pay due respect to ignorance and should be frank about uncertainty. This is also why we need a network to work as a global team.

With the benefit of our global network, we serve not only externally but also internally. In each jurisdiction, our people have spent on average a decade or two specializing in finance and tax topics, and accumulating hands-on experience from numerous actual cases. It is not about telling the clients what to do, but to work with the clients to grow their business.

 

Q: You stressed that you are different from your peers. Compared with other firms, either global chains or smaller ones, how is yours different from them in terms of services or perhaps ideology?

Small is beauty. In this market, we have young firms like WTS, which is celebrating its 10th anniversary, as well as century-old firms. The clients don’t care how old the firm is. The only thing they appreciate is a good deal of listening and attention, ability to accomplish tasks and increase value. This is especially relevant to strategic tasks, such as tax planning, risk control and compliance enhancement. That is also where innovation can play an important role as I mentioned earlier.

We take pride in offering focused and in-depth services. We play the role of a partner with our clients on their path to growth. It is more like running a marathon than a 100-meter sprint. We would rather serve clients along their path to growth than serving them like a nodding acquaintance. We make sure each of our clients can get a fair amount of our focused attention.

 

 Q: China is expected to reform its taxation system, especially income tax. What is your next move?

 I have witnessed and experienced numerous tax reforms in China since I started my tax advisor career in the early 90s. It is fair to say that many of the early tax reforms were focused on administrative improvement while the recent ones are related to globalization.

Globalization is a two-way trend. On the one hand, Chinese companies are going out under the "Belt and Road" initiative; on the other hand, international tax practices are introduced to China. For example, OECD’s anti-tax avoidance program, officially known as the base erosion and profit shifting (BEPS) project, has been officially endorsed by China and many of its rules have been incorporated into Chinese tax laws and regulations. This is a vivid example of knowledge import.

 

Q: What do you think of the Chinese market? Are you going to expand business on the mainland?

 We are excited to be part of this fast developing economy which is the locomotive of the global economy. Globalization also occurs in our sector as I mentioned earlier. Tax compliance is a high risk for multinational companies. Our mission is to help our clients benchmark their tax practices in China against their global peers. Aggressive tax planning is already an obsolete practice in our business. Strict tax compliance is now high on the boardroom agenda of many MNCs. Never before has there been a greater need for a solid tax compliance program than it is now. We are foreseeing a change in tax culture and sustainability strategy among some of our clients, from being a tax dealer to a socially responsible tax resident. Such a change will call for more stringent and scrupulous tax advisory services. There will be a stronger need for better tax services.

We will grab this opportunity to grow business but we will take a cautious approach for expansion. We now operate in Beijing, Shanghai and Hong Kong. We will take coordinated steps for expansion only on the condition that the expansion is supported by seasoned and experienced professionals.

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