Report shows income tax problems
By Zhan Lisheng (China Daily)
Updated: 2006-07-06 08:39
While the rich get richer, authorities are left with the taxing issue of how
to get them to pay their dues.
The top 100 taxpayers in South China's
booming Guangdong Province turned in individual income taxes of 229 million yuan
(US$28 million) in 2005, just 1.1 per cent of the total amount, according to a
report by the provincial tax bureau.
All people earning over 1,600 yuan
(US$200) per month must pay income tax, with the base rate 5 per cent. People
earning over 100,000 yuan (US$12,500) per month pay 45 per cent. The report
covered the whole province with the exception of Shenzhen Special Economic
Zone.
Rao Songde, a director of the bureau, said that while the
government has made efforts to monitor payments by the wealthy, many are still
trying to wriggle out of it.
"Those who pay the most individual income
tax are by no means the richest people in the province," he said.
Of the
top 100 individual income tax payers in 2005, only nine were corporate
chairpersons or board members of the thousands of profitable enterprises in the
Pearl River Delta.
Yang Weihua, a professor with Sun Yat-sen University's
tax and financing research centre, said that it is easy for rich people to avoid
paying tax.
"Loopholes in the nation's tax laws have made it easy for
high-income people to pay minimal tax," Yang said.
He mentioned
exemptions on real estate tax and inheritance as examples.
"Frequent use
of cash and the far-from-perfect credit system in China have made it equally
easy for high-income people to evade taxation," he said.
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