Party paper hits out at foreign firms, alleging widespread tax avoidance

A scathing attack by the People's Daily on multinational corporations, accusing them of exploiting China through tax avoidance, is a worrying sign for foreign firms on the mainland, say analysts.

In almost a full page of coverage yesterday, including a report and a signed commentary, the newspaper said foreign corporations were funnelling away real profits.

The commentary said tax-avoiding practices by some multinationals had deprived the nation of enormous revenue, even though they had taken advantage of its labour, land, resources, and huge market.

"Why do the multinational companies get all the profits … while [we] let the tax revenues run away?" the commentary reads.

"Taxation is at the core of national sovereignty. [We] have to take effective measures to stop tax revenue losses … to protect the national economic interests."

The tax accusation against foreign firms follows Beijing's recently stepped-up antitrust probes. Foreign business groups have voiced concern that outside firms have been unfairly targeted by mainland antitrust regulators, with probes into at least 30 foreign firms as China seeks to enforce a 2008 anti-monopoly law. Officials denied this.