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Beijing fights tax evasion
( 2002-08-01 09:34 ) (1 )

The representative offices of foreign firms in the Chinese capital have become the latest target of a campaign against tax evasion.

By July 15, some 3,200 Beijing representative offices of foreign companies had conducted "self-examinations" concerning the payment of personal income tax by their staff, according to the Beijing Taxation Bureau.

The sources said problems of varying degrees of seriousness were found with the "self-examinations" of 1,100 offices, or 34 per cent.

A total of 63.56 million yuan (US$7.66 million) in overdue personal income tax had been paid by July 15.

One of the reasons behind the delay in the payment of personal income tax was misunderstanding of China's tax law, the sources said.

The tax authority took prompt measures to help members of staff of foreign firms in Beijing get acquainted with Chinese law, including opening a telephone hotline to answer their questions.

Beijing's tax authority has beefed up its campaign against tax evasion in recent months, with high-income groups being the major target.

The sources added that the "self-examinations" in foreign firms' representative offices would last until September, after which the authority would carry out spot checks.

Offenders caught in the spot checks would be prosecuted, the sources said.

Spot checks by the Beijing Taxation Bureau in the first half of the year showed that as many as 71 per cent of the 7,166 businesses checked had failed to pay all their taxes on time, Beijing Youth Daily reported on Tuesday.

The 5,057 "problem businesses" eventually coughed up more than 800 million yuan (US$96 million) in unpaid taxes, bureau officials were quoted as saying.

The officials blamed poor standards set by business managers and accountants, and "lenient" punishment for rampant tax dodging in the Chinese capital.

In a bid to curb tax evasion, the tax authority will promote the use of an online tax-payment system, encourage tip-offs by insiders and intensify spot checks.

In another development, China will increase the use of information technology in its taxation system in a bid to improve efficiency, said Jin Renqing, director of the State Administration of Taxation.

The tax department will hasten the setting-up of a national computer network to collect data on taxpayers and fight against tax evasion, Jin said.