Nanjing developers dodge $47m in tax
Only one of Nanjing's 88 property developers paid their taxes last year. The others owe the taxman 50 million yuan between them.
A Nanjing Administration of Taxation spokesman said it was shocked when auditors found 87 of the 88 developers in the city had falsified their books to avoid paying taxes.
'Property development is a lucrative business and we always keep our eyes on the developers. How could you ever imagine the problem being so serious?' the spokesman said.
The Nanjing tax office fined the 87 developers about 15.9 million yuan and imposed charges of 8.5 million yuan on top of the taxes owed, Xinhua said.
The news agency interviewed a property developer who was under investigation. He said the profit margin for real estate business in Nanjing was usually between 30 and 40 per cent, but in their annual tax returns most developers claimed they were 'losing money' or 'making very little profit', Xinhua reported.
It said the developers often tried to hide their profits by making complicated investment projects, leaving out the advance payments they had received in the accounting books and delaying tax payments.
Tax evasion is a serious problem on the mainland. Officials said in July that China had lost more than 30 billion yuan annually in recent years due to tax avoidance by multinational corporations.
