Tax officials to home in on hot property sector

PUBLISHED : Sunday, 15 April, 2007, 12:00am
UPDATED : Sunday, 15 April, 2007, 12:00am

Tax authorities on the mainland have targeted the red-hot property sector for special checks this year, as prices in some cities remain stubbornly high despite macroeconomic controls to rein in the industry.


The State Administration of Taxation, while pledging to streamline collection from real estate companies, will also focus its investigations on a handful of property firms that 'under-report earnings but inflate incurred costs', Xinhua reported on Friday.


'Our focus is to check on a handful of real estate enterprises which don't account for or under-report their earnings, exaggerate costs and evade taxes,' the administration's inspection division chief, Ma Yimin, said.


He said they would also target individual high-income earners, amid a new tax-return filing system implemented this month after the mainland revised individual income tax laws. The law now requires mainlanders and overseas nationals who have lived on the mainland for more than a year to lodge personal income tax returns, including the declaration of offshore earnings, if they earn more than 120,000 yuan a year.


Beijing's accelerated crackdown on tax evasion has in part increased tax revenue, which soared 25.5 per cent to 1.13 trillion yuan in the first quarter of this year.


The administration also listed 10 of the biggest tax violation cases last year involving fake invoices for capital gains tax and rebates.


Topping the list was the 'Thunderbolt No1' operation, which spanned 34 provinces. The 10-month operation inspected 1,374 enterprises and found 55,660 fake invoices totalling 6.73 billion yuan.


Mr Ma also said it would also make industries such as finance and energy focal areas of inspection.


Authorities had retrieved 38.6 billion yuan of unpaid tax last year, 1.9 billion yuan more than previously, after inspecting 860,000 taxpayers and households.