Tax authorities in Beijing plan to fight tax evasion by issuing more scratch-and-win receipts with smaller award values, a move they believe will inspire more people to ask for invoices for the products and services they purchase.
Wang Jiping, director of Beijing's local taxation bureau, confirmed this information yesterday, according to a report in the Beijing Times.
According to Wang, the tax authorities plan to issue 1 million copies of invoices with an award value of 5 yuan, replacing the previous scheme when they allocated about one hundred 50,000-yuan awards last year.
Many Chinese do not ask for receipts after paying for goods and services. Businessmen who try to avoid paying taxes sometimes do not offer to issue invoices or receipts to their customers.
With the implementation of the new policy, the prize-winning rate this year has grown to 6 percent from the previous 2 percent, the article said. By encouraging more people to request receipts from shops or restaurants, the tax authorities hope that they will be able to create a win-win situation for consumers and tax authorities.
Another advantage of the plan is that citizens would not have to pay income tax on small winnings. The relevant law stipulates that the flat tax rate of 20 percent is applicable for occasional incomes gained from a single receipt exceeding 800 yuan.
The current scratch-and-win scheme offers monetary awards in eight amounts, ranging from 10 yuan to 50,000 yuan.
(CRI January 21, 2008)
