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Let them eat cake, after tax

By Liu Sheng (Global Times)

08:48, September 06, 2011

As one of the four most important festivals in China, the Mid-Autumn Festival is a great time to catch up with family and friends. However, the most important aspect of this festival for many is the moon cakes. People also receive these moon cakes from their employers as a non-cash reward. However, this year the feeling of giving has been overshadowed by a newly introduced tax.

Tax authorities now require businesses to list moon cakes given to staff as part of their income. The cost of the moon cakes should be reported and if the employees' total salaries, including the price of the moon cakes, exceeds a certain amount, they should be taxed accordingly.

The policy has caused public dissatisfaction, and personally, I think it's unreasonable, too.

First of all, suppose that every business offers moon cakes, which cost 300 yuan ($47), to employees whose salaries are around 6,000 yuan. The employees will then need to pay an additional 60 yuan in tax. For the tax bureau, the total amount is a drop in the ocean when compared with other taxes like value-added tax. What's more, the tax bureau has to arrange staff to keep an eye on businesses which may try to avoid paying the new tax. This is a waste of resources as the total tax they will receive from moon cakes is negligible.

But this is just one aspect of how ridiculous this new tax is.

Moon cake producers and sellers are already taxed anyway. Boxes of eight moon cakes costing between 100 yuan to over 1,000 yuan are commonly seen on supermarket shelves, and the sales tax has already been incorporated into the price, so why the need to tax people again?

When a brainless policy is implemented, the public always manages to find some clever strategies to sidestep it. The wisdom and craftiness of the masses can never be underestimated. Some suggest that since the moon cakes will be taxed when their cost reaches a certain amount, they should only ask for two pieces or split a box with three other colleagues. Some even suggest that businesses write down that they were buying other cakes such as "noon cakes" when filling in the receipts.

Another idea is refusing to accept the moon cakes entirely. Since some people, especially public servants, will get more than one box of moon cakes. It's more like a burden for them and they usually sell these extra moon cakes to scalpers or give them to relatives.

As far as I am concerned, next year, businesses should consider giving employees cash instead. Since both moon cakes and cash will be taxed, why not at least let employees to choose the one they want.


Leave your comment2 comments

  1. Name

Lois White Buffalo at 2011-09-1072.102.231.*
Native American trade mooncake for smoked fish. Fall festival and smoke peace pipe!Mid Columbia Sin Cayuse Nation(it is true that Chairman Mao will laugh about copycat taxes of market mania)
leisureman at 2011-09-06124.82.88.*
Chairman Mao is laughing ! China has been infected by USA-bug ! Free market will eventually turn the country upside down !!!

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