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A sign advertising Chinese yuan on a tram in Hong Kong. (Mike Clarke/AFP/Getty Images)
China suffered tax evasion worth an estimated one trillion yuan (US$157 billion) in 2011, said a report that was recently submitted to the People’s Republic of China’s chief administrative authority, the State Council.
According to Hong Kong’s Cheng Ming magazine, the report was the result of a joint investigation carried out between February and May by the State Council Research Center and the National Development and Reform Commission.
The report identified eight major sources of tax evasion, with state-owned enterprises coming in first place and accounting for 26–28 percent of evaded taxes.
The Chinese regime’s leaders appear to be responding to the findings.
During the State Council’s annual conference held this month, Premier Wen Jiabao urged officials to crack down on tax evasion, seize illegitimate funds set up by Party and state departments, and investigate instances of salaries earmarked for nonexistent state personnel. He also urged officials to become more transparent.
According to Cheng Ming, Vice Premier Wang Qishan also had a conference call with provincial and local state officials, stressing that in areas with serious tax evasion problems, the area’s local authorities, taxation bureau, and supervision bureau would all be held accountable.
He added that China has now become a well-known tax haven both at home and abroad, making a mockery out of the existing rules and regulations.
Some executives of state-owned enterprises and public companies were even “competing with one another to see who could evade the largest amount of taxes or establish the most connections with government officials,” said Wang on the call.
It is widely speculated that Wang will be chosen as a member of the ruling, nine-member Politburo Standing Committee at the 18th Party Congress later this year.
Read original Chinese article.
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