China has just asked people working in the entertainment industry to be faithful in paying taxes, especially the unpaid ones dating back to 2016. The country warns as it tightens tax policies and collection methods in the wake of a scandal involving the country's highest-paid actress named Fan Bingbing.
As people may recall, Fan is facing fines totaling approximately 479 million RMB ($70 million), along with another bill for back taxes of 255 million ($37 million). Other media outlets in China are reporting that she could owe considerably more, with 880 million RMB ($128 million) the most commonly cited figure.
If Fan pays the staggering sums in full she will escape criminal prosecution, however, since it is her first offense. China's highest-paid actress and the go-to face for luxury endorsements in the country, Fan has not been seen in public since July 1, when she became embroiled in a very public tax evasion scandal. She also had been silent on Chinese social media since July 23.
According to South China Morning Post, the announcement on Monday came after Fan was told to pay 884 million yuan (US$129 million) in fines and unpaid dues that she avoided by using split, or "yin-yang", contracts to disguise her true earnings from the tax authorities.
In a notice, the State Administration of Taxation said individuals and companies in the entertainment industry must pay any taxes owing for the last two years. The tax bureau said those who paid their bills by the end of the year would be exempted from any penalties.
It also said it would reduce the penalties for those who paid the taxes they owed by the end of February. The authority will carry out audits and issue bills to tax evaders over the next four months.
Separately, five senior tax officials in Wuxi were warned, reprimanded or lost their jobs on Monday for mismanagement over the Fan case, according to the official Xinhua News Agency.
Fan's punishment has sent a warning to the country's entertainment business, where split contracts - one setting out the real payment terms and a second showing a lower figure for the authorities - are commonly used to dodge tax, Yahoo! News reports.
Former CCTV talk show host Cui Yongyuan first accused Fan of tax evasion in May. Those revelations caused outrage on social media and were followed by an investigation, with Fan disappearing from public view for months.
