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Government steps up tax checks to stem abuse
By Su Bei (China Daily)
Updated: 2005-04-20 06:20

China will launch tax inspections into nine areas, including the real estate industry, as well as steel and cement companies this year.

"Besides nationwide checks on personal income tax, local tax bureaux will focus on two or three of the nine areas in accordance with their own situation," said Liu Taiming of the State Administration of Taxation.

Liu said the nine areas also include coal production and transportation, motorcycle production and sales, waste collection, farm products processing, and export companies which have asked for tax rebates.

"The government will step up efforts to crack down on illegal tax-related cases," said Liu, head of the administration's Inspection Department.

According to Liu, China's tax departments at all levels audited 1.23 million taxpayers last year, which helped amass overdue taxes and fines of 36.8 billion yuan (US$4.4 billion).

Tax inspection departments above county level also uncovered 523,000 cases of improper tax practices last year, Liu said.

"A majority of the illegal cases were related to fake value-added tax invoices," he said.

Tax authorities will continue to co-operate with public security departments to fight illegal tax practices, he said.

Economists pointed out that stricter tax collection contributed a lot to the country's tax revenue every year.

One economist claimed that given China's enormous amount of enterprises, there were always some that tried to slip through cracks in the system. Due partly to these increased efforts, China's tax revenue grew a year-on-year 20.4 per cent to 756 billion yuan (US$91.1 billion) in the first quarter.

But Xie Xuren, minister of the administration, said earlier this year that the country could not rely heavily on these new measures alone to increase tax revenue.

(China Daily 04/20/2005 page2)

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