Iron hand on mainland tax cheats
The mainland is to overhaul its tax system, with stricter enforcement and reinforced penalties, including execution, for serious evaders.
'From now on, tax officials should have an iron face, an iron heart and an iron hand,' Vice-Premier Li Lanqing said. 'As you can see from our TV reports, some people have been sentenced to death because of tax evasion.' Mr Li talked for an hour in the Diaoyutai State Guesthouse after last week's annual National Economic Work Meeting of senior leaders.
He said he was responsible for fiscal policy in Premier Zhu Rongji's cabinet. He promised sweeping reforms of the tax system and said the Government was committed to a pro-active fiscal policy in the coming year.
'We are going to improve the taxation system and we are going to build all the supporting facilities such as computer networks for the Tax Bureau and the banks so as to supervise the income of our people, be it legitimate or illegitimate,' Mr Li said. 'I can tell you that there are several scores of loopholes in our system and we are going to plug every one of them.' Mr Li pointed to progress in recent reforms of the People's Bank, including the move away from provincial branches to the establishment of regional bank branches, something 'which has enabled the Central Bank to go beyond the intervention of local governments'.
While admitting that the Government was still dealing with problems from the past, Mr Li said: 'We have, by and large, put in place the system of commercial banks where the [local] government will not be in a position to tell the banks where loans should go.' China also was firmly committed to its 'pro-active fiscal policy' and would continue pouring money into infrastructure projects next year.
Mr Li said the key to consumer spending lay in reforms to the commercial housing loan market. When these took off, it would open up the market to ordinary people.
'Once these have begun, very visibly we are going to stimulate the consumption of ordinary people,' he said.
'And we have followed the Americans, that is consumption in advance, through loans from the banks.'
