South China's Guangdong Province is turning up the heat on people who attempt to commit export tax rebate fraud, a senior provincial government official said recently.
Addressing a provincial conference on foreign trade, Vice-Governor Tang Bingquan said teams of finance and trade officials have been reinforced in the past month to bolster investigations of export swindlers operating across the province, especially in eastern Guangdong.
Both the province and local cities have organized special working teams composed of officers from the administration departments of taxation, customs, foreign exchange and foreign trade.The teams will spend the next year searching the financial records of all the export enterprises which have been suspected of trying to cheat the export tax rebate system.
Guilty parties, including any law-enforcement agency officials who might be involved, will face heavy punishment under the law, Tang said.
"In order to maintain the economic order, we must level the same strong blows on swindlers as we do on smugglers and criminals," the vice-governor explained.
Guangdong's fight against export tax rebate fraud is in response to a call from the central government, which is concerned about seemingly rampant swindling in China's largest export base..
Although authorities do not yet know how much has been lost to the fraud, a national investigation has revealed that most of the export tax rebate manipulation involved commodities exported from the Guangdong cities of Shantou, Chaozhou, Jieyang and Shanwei.
Last year, a working group from the State Council exposed over 140 enterprises in Chaoyang which were involved in export fraud.
Last December, the Ministry of Foreign Trade and International Co-operation deprived a company of its export licence because of its involvement in export tax manipulation.
The guilty firm, Guangdong Yingyuan Group, was found to have swindled more than 18.8 million yuan (US$2.27 million) in tax rebates between June of 1999 and June of 2000.
"This year, we are working to plug many of the loopholes in the tax rebate system which companies have been able to exploit in the past," said Liu Wenjie, director of the Guangdong Administration of Customs (GAC).
Liu referred to the electronic processing system, launched by GAC on January 1, which uses networked computers to identify fake documents.
To encourage exports, the State has raised tax rebates three times since 1998. China's exporters now enjoy an average tax rebate rate of 15 percent for selling products to other countries.
A total of 310 billion yuan (US$37.3 billion) in tax rebates were given to exporters in the past five years.
In that time, a number of trading enterprises were apparently able to pilfer large sums of money by using fake documents provided by law-enforcement officials to make it seem as if the stolen cash was actually part of a rebate.
(China Daily 01/20/2001)