Can't afford to pay
The Cangzhou local government is breaking the law by charging an overhead levy, Zhang Junwei, director of the macroeconomic research office of State Council Development Research Center, told the Global Times.
Zhang said the tax threshold is already too low, especially for small-sized enterprise, which means they are living under an economic burden. Research by his team conducted in 2011 shows that the tax burden for micro-enterprises is much heavier than those for white-collar employees.
Thus, some enterprises evade paying taxes, which explains why they are afraid of showing their account books to taxation officers, said Zhang.
Besides, enterprises have to find ways to maintain a good relationship with the local taxation departments, so that they can bargain about the amount of tax they pay, all contributing to intangible corruption, he lamented.
In order to pay less than charged, some businessmen use their guanxi (connections) to help in the bargaining process.
"At first I was asked to pay 100,000 yuan. Now I only need to pay 40,000 yuan after using my guanxi. Have you turned to someone for help?" one entrepreneur was quoted as asking his peers by the Beijing News.
"Enterprises should make contributions and pay extra taxes for the past two years since we haven't collected the full quota for 2012," a tax official named Guo told Zhang in his office.
On the official's desk, Zhang caught sight of various pieces of paper, listing at least seven other enterprises and the tax amounts they were to be charged, ranging from 8,000 to 20,000 yuan apiece.
By November, Li hadn't paid the extra tax although the demands were lowered to just 30,000 yuan. "Enterprises are facing a recession, and extra taxes will force us to close down quickly. Who would the government collect tax from if enterprises went bankrupt?" he asked.
Returns on sales in the steel processing industry for September were only 0.82 percent nationwide, ranking the lowest among all industries.
Similar overhead levies were also reported in several other counties in Cangzhou. After media exposure, a senior taxation official from Cangzhou was dispatched to investigate, but no results have been released as of yet.
Feedback
RSS
