China tax figures don't add up

PUBLISHED : Sunday, 14 September, 2003, 12:00am
UPDATED : Sunday, 14 September, 2003, 12:00am

If the top businessmen are as rich as Forbes magazine claims they are, their firms are not paying their dues. Only four of its top 100 are on the list of the 50 biggest taxpayers

Companies belonging to the mainland's richest people are conspicuously absent from a list of the top private business taxpayers released by the central government.

Only four enterprises owned by people included in Forbes Magazine's 100 wealthiest list showed up in the State Administration of Taxation's 2002 report of the 50 biggest private business taxpayers.

None of the companies run by people Forbes said were the 25 wealthiest Chinese made the list of top taxpayers. One of the entrepreneurs whose company is listed as a top taxpayer - Li Haicang - is even dead.

By Forbes calculations, the 10 wealthiest tycoons on the mainland were together worth about US$6 billion.

According to the report, the nation's 50 largest private business taxpayers contributed a total of 1.24 billion yuan (HK$1.17 billion) to the nation's treasury last year.

By comparison, the top two state-owned firms, The Daqing Oil Field Corporation and China National Petroleum Corporation respectively paid 17.5 billion yuan and 10.76 billion yuan in taxes.

Top of the list of private companies was Yuanda Air Conditioning, headed by Zhang Yueyong, with payments of 127 million yuan. Next was Shanxi Haixin Iron and Steel, which paid 115 million yuan. The company was formerly run by Li Haicang, who was murdered in January.

In 2002, Forbes Magazine ranked Mr Zhang the mainland's 26th richest person, with assets of 1.71 billion yuan, while Li was ranked 27th with assets of 1.62 billion yuan.

The two other entrepreneurs from the Forbes list whose companies were among the top taxpayers were Pan Pan Group's Han Zhaoshan and Xinjiang Hualing Group's Mi Enhua. Pan Pan Group was the seventh largest taxpaying private firm with payments of 450 million yuan while Hualing Group came in at 35th, with payments of 106 million yuan.

In the Forbes rankings, the men's placements were reversed - Mr Mi was above Mr Han as the 37 richest person with assets of 1.29 billion yuan, while Han was 77 with assets of 790 million yuan.

When the new Fortune magazine ranking of the top 400 richest mainlanders is examined, the owners of only 12 companies appear among the top 50 taxpayers.

A report on the rankings in the government-run China Tax Service magazine said many of the companies had refused to release their financial information to the magazine, and rejected any notion of public supervision.

Magazine publisher Zhang Musheng was quoted as saying that the massive discrepancies between the wealth of some private businessmen and the amount of tax their companies pay shows that China's notoriously inefficient tax collection system is still not working very well. He said entrepreneurs were escaping payment by using 'empty words and figures'.

Paying their way

Daqing Oil Field Corporation Heilongjiang, 17.5 billion yuan

China National Petroleum Corporation

Beijing, 10.76 billion

Yuxi Hongta Tobacco Corporation

Yunnan, 8.41 billion

China Development Bank

Beijing, 7.72 billion

People's Republic of China Ministry of Railways

Beijing, 6.15 billion



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