Officials Set to Close Tax LoopholeLawmakers are due to review an amendment to the tax collection law next week to prevent state taxes being nibbled away, officials was quoted as saying by Friday's Chinadaily.The State Council is expected to submit the amendment to the 17th Session of the Standing Committee of the Ninth National People's Congress, which opens in Beijing next Monday. The amendment has been drafted because some local authorities have been transferring taxes earmarked for central government to their own treasuries by mixing local and central taxation. This practice started when a system to share taxes between local and central authorities was brought in in 1994. The existing law on the administration of tax collection, which took effect in 1993, cannot deal with the new development because it does not mention the new practice. "The nibbling away of state treasury funds is not only crippling central government, but has also led to corruption,'' said Yao Jiamin, division chief of the Department of Tax Collection and Management of the State Administration of Taxation. Some local tax departments have moved funds which should have been sent to state coffers to their own treasuries, he said. "The amendment should fill the gap in the current law to prevent taxation evasion,'' Yao said. Some enterprises have evaded taxation through bankruptcy or merger, he added. "Huge amount of taxation has been lost due to loopholes in the legislation,'' Yao said. The existing law does not stipulate all tax duties and the responsibility of firms to inform tax collecting agencies before they declare bankruptcy or merge with other corporations. Yao said other unlawful practices that needed amending included selling illegal value-added-tax receipts, interfering with tax collecting agencies and illegal tax reduction and exemption. |
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