State-owned enterprises evade taxes: report
- Source: Global Times
- [00:38 August 28 2009]
- Comments
A dozen State-owned conglomerates have been found to have violated rules in paying taxes in a nationwide inspection campaign launched in April by the nation’s tax authority, China Business News (CBN) reported Wednesday.
Among the 24 conglomerates, the first group of companies that have undergone the tax inspection, 12 of them, including 10 financial enterprises and two power plants, were found to “have problems” by the State Administration of Taxation, according to CBN.
Problems with both individuals’ and enterprises’ income tax were found, the report said.
A branch of Shenzhen Development Bank in South China was found as “having failed to pay tax for prize money awarded by the State.”
Companies under the China Huadian Corporation (CHC), a pilot State-holding corporation, which has been authorized by the State Council to conduct State-authorized investment, were found to “have distributed allowances higher than State standards, such as housing and education allowances, to its employees, while tax had not been paid on the excess part of the allowance.
Other companies having similar problems mentioned in the list include China CITIC Bank, Bank of Communications, Everbright Bank, China United Property Insurance Company, People’s Insurance Company (Group) of China and China Pacific Insurance Group.
“China Huadian Corporation has not been informed officially by the State Administration of Taxation and we have no idea about the problems of our subsidiaries,” the person in charge of the Information Services Department at China Huadian Corporation told the Securities Daily yesterday.
One official at the State Administration of Taxation Inspectorate told CBN that, according to relevant tax rules, those enterprises on the list would be given a fine equivalent to between 0.5 and 5 times the amount of evaded tax.
Conglomerates will become the emphasis of future tax inspection in view of common international practice, and due to the fact that 3,108 conglomerate taxpayers contributed half of China’s tax revenue, according to the official.
“After analysis and summing up, we found the reasons behind taxation evasion are misunderstandings of the policy implementations, a lack of awareness of tax payment and the failure of supervision of subsidiaries by headquarters,” the official said.
The Global Times
