Starting on October 10th, China's State Taxation Administration launched a campaign to regulate tax payment in the film and TV industry. This came a week after China's tax authorities made public the results of an investigation into a tax evasion case by famous actress Fan Bingbing.
Fan was ordered to pay taxes and fines worth more than 129 million US dollars. And she will face criminal investigation if she fails to comply on time. In addition, the local taxation bureau in eastern China's Wuxi was criticized and called out for rectification. Relevant officials were given administrative sanctions of warnings and records of demerits.
“These are soft power icons which can be very useful to Beijing and China in terms of expressing their true nature of their country. So it's not just as simple as saying let's get the taxes from these people. They (tax regulations) have been lax in the past, not only in this industry, but in many industries,” said current affairs commentator Einar Tangen.
“What you are seeing here is a new-found decision by the Party and the government. They are going to collect what is owned by the government,” Tangen added.
The new campaign will include four phases. The first step is self-correction and examination. December 31 is the deadline for companies and individuals in the entertainment industry to voluntarily declare and pay previously evaded taxes from 2016 to date.
Those that come clean will not face administrative punishment or fines. The next phases include supervision, inspection into key firms, and summarizing progress in July 2019.
“The self-correction and the in-house checks, as well as the watchdog supervision should be conducted simultaneously. There should not necessarily be phase one or two, because (the taxes) are owed to the government,” said Han Hua, Fellow at the Chongyang Institute of Renmin University of China.
“I think what the government is doing here is sending a very strong message — no matter how high or how low you are, you must pay your taxes,” Einar Tangen concluded.
(If you want to contribute and have specific expertise, please contact us at opinions@cgtn.com.)