Three months after the mainland was supposed to begin levying a new tax on foreign employees, two more cities are preparing to adopt the controversial measure, joining Beijing to make a total of three cities to do so.
For the past two weeks Tianjin and Suzhou have been registering foreigners who work there, in preparation to start charging the long-delayed social security tax on non-Chinese employees, according to a person close to the situation.
The law was supposed to take effect nationwide on October 15, but Beijing was the only city that began registering foreigners working there on that date. The South China Morning Post reported that local governments were caught off guard by the new tax, complaining of having too little time to implement it. But even in Beijing the implementation has been chaotic, the person said.
In Chaoyang district, for instance, the local government issued a memorandum at the end of 2011 informing residents the law had to be implemented by January 20 'because few businesses have responded to the law'.
That followed the government's attempt to set a deadline of December 31, which was abandoned 'to give more time for companies to take action', the person said.
Cities have been told that contributions must date back to October 15, and that those who are late will have to pay a penalty of 0.05 per cent per day in interest - 18 per cent a year.
'So far three cities have begun [complying with the tax],' the person said. 'But other cities, like Shanghai, Dalian , Guangzhou, and Shenzhen, haven't done anything yet.'