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Last updated at: (Beijing Time) Tuesday, August 27, 2002

Official on Tax Evasion Case of 'Billionaire' Film Star

Since the tax evasion case in Liu Xiaoqing's Company was brought up to the public it has roused great reaction and responses in society. However, some people also took the advantage to raise a hue and din about it in order to peddle their own "news".


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Since the tax evasion case in Liu Xiaoqing's Company was brought up to the public it has roused great reaction and responses in society. However, some people also took the advantage to raise a hue and din about it in order to peddle their own "news". For this reason, the reporter of the People's Daily Online paid a visit to the Beijing Local Taxation Bureau in charge of handling the tax-evasion case in regard to Liu Xiaoqing's Company and interviewed the responsible person in charge about the relevant problems.

Q: So far we've found many taxpayers involved in tax-evasion cases why is Liu Xiaoqing's Company the only one to be dealt with by the tax office?

A: To deal with taxpayers involved in the tax-breach cases and actions is an important duty for tax-offices. In line with the rules and regulations the tax-offices must handle any and every person involved in actions in violation of the tax law. Those cases up to the criteria of being filed must be filed no matter whether s/he is a celebrity or a nobody, a big or small company, a state-owned enterprise or a private one, a local company or one having things to do with overseas. Actually, Beijing local tax-offices check over more than 10,000 taxpayers every year, of which about 1,000 involving in tax-cases are filed for investigation

Q: Why is it up to now that the tax-office began to deal with the tax-evasion cases of Liu Xiaoqing's Company?

A: For handling persons or enterprises involving in breach of the tax law, of course, it is the earlier to find out the better. However, it's not easy to achieve it whether in developed countries or in developing countries. The reason for it lies in: First, countries including China adopt a common practice in which taxpayers make self-declaration and tax-offices impose checks on some major ones. The checkup is a follow-up work when the self-declaration is said and done. And so it is a case quite normal for the checkup over taxpayers to be carried out a bit late.

Secondly, the tax evasion is usually carried out very much in the dark and particularly in China, many taxes are paid in cash with business being operated under the table. This has made it harder for tax-offices to impose taxes and to make a checkup over taxpayers.

Thirdly, For the moment, to administer tax checkup mainly depends on the tax information analysis, special case checkup, public tip-off and integrated analyses of other information. Though it has played an active role in finding out some tax-dodging cases yet it is still in a limited way.

Q: What are the tax-evasion problems found out in Liu Xiaoqing's Company and in Liu Xiaoqing herself?

A: Since Apr.2, 2002 the tax-office has started the checkup over the enterprises run by Liu Xiaoqing. Up to now it has brought to light that Liu Xiaoqing's Art and Culture Co. Ltd. conducted tax-evasion in such ways as not to write in, writing in less the revenue but more the cost or making false declaration for the cheating in tax-payment since 1996. It involves the following tax categories as turnover tax, tax for city upkeep and construction, enterprise revenue tax and personal income tax to be deducted and handed in by the company, etc.

In the checkup the tax-office also discovered that Liu Xiaoqing, except the income from the company she ran, drew her income from business performances, photo-shooting for advertisements, providing image rights or leasing her house-property, for which Liu should have made self-declaration of taxes but she failed to do so. Instead she dodged and covered up her income by signing false income-contracts with the payer's side and what's more is that when the tax-offices informed her to make up the taxes she should have to pay she still refused to do so. Therefore, for the tax evasion problems in connection with Liu Xiaoqing the tax department concerned will deal with it in accordance with the law.

Q: Are there any other companies run by some other celebrities listed into the "blacklist" of the tax-offices?

A: It is quite necessary for the tax-office to impose checkups over some selected trades and categories of taxpayers every year. The checkup and handling the case of tax evasion by Liu Xiaoqing's company have already roused our great attention. For the moment, it is a focal point in our work to check up and handle the tax-evasion problems in those highly earned trades and persons in line with the arrangement of the State Administration of Taxation of China. Therefore, it is by no means exclusive to have some other tax-evasion cases exposed and dealt with. Nevertheless, the "blacklist" talked of by some media is quite groundless.

Q: Whether the checkup and the handling of Liu Xiaoqing's company will exert influence on the normal development of some economies of non-public ownership?

A: Economies of non-public ownership are important component part of our socialist economy. For those individually, privately owned economies we must continue to encourage and lead them forward so as to make them develop along a healthy way. The checkup and handling of the tax evasion case by Liu Xiaoqing's company will by no means exert any influence on the normal development of other economies of non-public ownership. On the contrary, it will be conducive to forming an environment for a fair competition, thereby promoting all economies that are different in ownership to enjoy a fair competition in the market economy in China.

By People's Daily Online


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