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Authority moves to stop tax evasion
By Zhang Fengming |
July 20, 2009, Monday
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Online Edition
Online Edition
CHINA'S top tax authority has made a list of about 100 major domestic companies for self audits as it tightens tax collection due to slower economic growth this year, sources said.
The State Administration of Taxation has issued two notices this year, listing big companies in five major industries - banking, insurance, petrochemicals, electronics and telecommunications - asking them to tighten internal tax procedures to avoid tax evasion, sources familiar with the issue said.
"It's the first time the SAT named certain companies during the self-audit program," said an unnamed industry veteran. "The campaign has existed for years and in the past it was largely just a procedural issue. However, this year, the SAT efforts are obvious."
The companies are mainly big tax contributors. They represent sectors with high profits or industries where tax avoidance is more likely.
If unpaid tax is discovered and reported voluntarily to the tax body, companies won't need to pay a penalty. If the authority finds irregularities on its own, they will charge penalties and fees for overdue tax.
The list was not made public, therefore industry sources requested to remain anonymous.
It is also likely that the SAT may issue a third list as part of the self-audit campaign this year, the sources said.
The industry sources said the SAT may need to further strengthen efforts to fight tax avoidance and tax evasion, especially during a slowing economy.
China's economy grew 7.1 percent in the first half, showing recovery signs after the worst financial crisis since the 1930s hit China's external demand. But momentum is still weaker than that of 2008 when China's economy grew 9 percent.
China's total tax income slid 6 percent in the first half to 2.95 trillion yuan. Corporate income tax tumbled 13.8 percent to 682 billion yuan in the same period on year.
The State Administration of Taxation has issued two notices this year, listing big companies in five major industries - banking, insurance, petrochemicals, electronics and telecommunications - asking them to tighten internal tax procedures to avoid tax evasion, sources familiar with the issue said.
"It's the first time the SAT named certain companies during the self-audit program," said an unnamed industry veteran. "The campaign has existed for years and in the past it was largely just a procedural issue. However, this year, the SAT efforts are obvious."
The companies are mainly big tax contributors. They represent sectors with high profits or industries where tax avoidance is more likely.
If unpaid tax is discovered and reported voluntarily to the tax body, companies won't need to pay a penalty. If the authority finds irregularities on its own, they will charge penalties and fees for overdue tax.
The list was not made public, therefore industry sources requested to remain anonymous.
It is also likely that the SAT may issue a third list as part of the self-audit campaign this year, the sources said.
The industry sources said the SAT may need to further strengthen efforts to fight tax avoidance and tax evasion, especially during a slowing economy.
China's economy grew 7.1 percent in the first half, showing recovery signs after the worst financial crisis since the 1930s hit China's external demand. But momentum is still weaker than that of 2008 when China's economy grew 9 percent.
China's total tax income slid 6 percent in the first half to 2.95 trillion yuan. Corporate income tax tumbled 13.8 percent to 682 billion yuan in the same period on year.
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