The Weathy Evade Taxes? Income Tax Still on Agenda

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Last updated at: (Beijing Time) Thursday, July 04, 2002

The Weathy Evade Taxes? Income Tax Still on Agenda

Last year the Wall Street Journal brought out the "Ten Richest People in China". However, many of those on the top list evaded from paying income tax because they merged their personal income into the factory expenditure. The companies are their own properties and so the expenses for their personal use are all calculated into the factory expenditure prior to paying the taxes.

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Income taxes of the highly paid

As Prof. Hu An'gang of the Institute of Public Administration and Management of Tsinghua University holds, the year of 2000 saw the income taxes in China come to RMB 51.1 billion yuan, accounting for only 0.6 percent of the GDP, far below that of the low-earned countries.

This shows, the Chinese taxation system is relatively ineffective in the imposition of personal income taxes and most of the highly paid didn't pay enough as what they should have paid. Therefore, in taxation China has to learn from the experience of other countries in the world, enforcing the punishment on those who try to evade the tax payment.

Chen Dongqi, Director of the Economic Research Institution of the State Planning Commission suggests: it has to introduce a taxation policy of structural regulation to raise the imposition line in taxation and raise to a great extent the taxation rate of the highly paid.

Persons concerned in the State taxation department told the reporter, they've already taken heed of the facts. Some big bosses of companies put that part of personal income that should pay taxes into the expenditure of their companies. This goes against the accounting system. And so persons concerned say measures must be taken to enforce the personal income taxation on the rich of the social strata.

According to statistics, in 2001, out of the total deposits of RMB 7000 billion-yuan, that for the less than 20 percent rich people occupied over 80 percent. However, the personal income taxes handed in were short of 10 percent of the total income taxes collected. The main body of the income-tax-payers remains still the salaried employees.

Nine categories of the highly paid

As defined by the State Taxation Administration the highly paid people fall into the following nine categories: private owners of relatively bigger businesses, individually invested enterprises and enterprises of partnership, individual big dealers of industry and commerce; enterprise-contractors or lease-holders and distributors; project-undertakers; executives of institutions and enterprises, members of board of directors, actors and actresses, fashion-models, football coaches and players and sportsmen; brokers of performances, sports and other economic activities; Individually-funded lawyers or of partnership in business; doctors, tour-guides, beauty-parlor hairdressers, chefs and stock-appraisers, musicians or master-musicians, acousticians, designers of interior furnishing and other free-lances and some other people including secretaries of townships and so on and so forth.

However, as to how much pay a month or how much a person gets is defined as the highly paid, so far the government has no definite norm for it. In fact, this can only be defined in accordance with the local circumstances.

To date, the Beijing Taxation Bureau has defined the key taxpayers as those whose annual income are over and above RMB 100,000 yuan, those who have several channels of income and those who need to declare their personal income for a second time and those of the alien nationalities.

Moreover according to investigation, there are over 30,000 people in Beijing whose annual income are over and above RMB 100,000 yuan. That is to say, now in Beijing there are at least 30,000 people whose tax payments are to be put under supervision as key taxpayers.

By People's Daily Online

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