[Home] [Databases] [WorldLII] [Search] [Feedback] Laws of the People's Republic of China

You are here:  AsianLII >> Databases >> Laws of the People's Republic of China >> CIRCULAR OF THE STATE COUNCIL CONCERNING THE APPROVAL AND TRANSMISSION OF SUGGESTIONS ON STRENGTHENING THE WORK OF TAX COLLECTION ADMINISTRATION OF SELF-EMPLOYED PRIVATE ECONOMY AND INTENSIFYING TAX COLLECTION ON AUDIT OF ACCOUNTS BY THE STATE TAXATION ADMINISTRATION

[Database Search] [Name Search] [Noteup] [Help]

CIRCULAR OF THE STATE COUNCIL CONCERNING THE APPROVAL AND TRANSMISSION OF SUGGESTIONS ON STRENGTHENING THE WORK OF TAX COLLECTION ADMINISTRATION OF SELF-EMPLOYED PRIVATE ECONOMY AND INTENSIFYING TAX COLLECTION ON AUDIT OF ACCOUNTS BY THE STATE TAXATION ADMINISTRATION

    The State Council has approved the "Suggestions on Strengthening the work
of Tax Collection Administration of Self-employed Private Economy and
Intensifying Tax Collection on Audit of Accounts" by the State Taxation
Administration which is transmitted to you for compliance.

    Strengthening of tax collection administration of self-employed private
economy and intensification of tax collection on audit of accounts are
important measures in the standardization of administration of self-employed
private economy and promotion of the healthy development of self-employed
private economy. People's governments at all levels should attach great
importance to it, earnestly strengthen leadership and coordinate the work of
departments of taxation, industry and commerce administration, public security
and finance in actively and steadfastly doing this work well and help the
tax departments solve the difficulties and problems emerging in the work.
The State Taxation Administration shall, in combination with deepening the
reform of tax collection administration, earnestly conduct the organization,
guidance, supervision and inspection of this work. All departments concerned
should support and cooperate closely with one another to ensure the smooth
implementation of this work.

    Specific measures for the implementation of this Circular shall be worked
out by the State Taxation Administration in conjunction with the departments
concerned. People's governments of all provinces, autonomous regions and
municipalities directly under the Central Government and municipalities
under direct planning by the state shall report to the State Council on
the status of implementation of this Circular by the end of July with
copies dispatched to the State Taxation Administration.

Appendix: SUGGESTIONS ON STRENGTHENING THE WORK OF TAX COLLECTION
ADMINISTRATION OF SELF-EMPLOYED PRIVATE ECONOMY AND INTENSIFYING TAX
COLLECTION ON AUDIT OF ACCOUNTS (The State Taxation Administration  
January 10, 1997)

    The rapid development of the self-employed private economy in our
country since the implementation of the policy of reform and opening up
has played a positive role in the development of the social productive
forces, bringing prosperity to the socialist market economy, adding to
the revenue of the state finance, alleviating the pressure on urban and
rural employment and making people's life more convenient. However, there
also exist a number of problems in the process of the development of the
self-employed private economy, especially the phenomena of no account to
audit and incomplete accounting books in business operations and disorder
in financial management are quite common, and the question of state tax
evasion is outstanding which have aroused the concern of the whole society.
This state of affairs, if not changed, will not be conducive to the healthy
development of the self-employed private economy and fair competition, nor
will it be instrumental to the implementation of the Tax Law. Therefore,
earnest and effective measures have to be taken to further strengthen the
work in the financial management and taxation administration of the
self-employed private economy. To this end, the following suggestions are put
forth:

    1.Comprehensive and Accurate Implementation of the Party's and the
State's Policies on the Development of the Self-employed Private Economy.
Joint development of multiple economic elements with the economy of public
ownership as the main body is a policy long adhered to by the Party and State.
Continuous encouragement and support shall be given to the development of the
self-employed private economy as an important supplement to the economy of
public ownership; integral employment of economic, legal, administrative,
ideological and educational means shall be followed to step up guidance,
supervision and administration of the self-employed private economy; the
just business operations and legitimate income of households of the
self-employed private economy shall be protected; in the meantime, tax
collection administration of the self-employed private economy shall be
strengthened and tax collection on audit of accounts shall be intensified so
as to create an environment of fair competition and promote the healthy
development of the self-employed private economy.

    2.Improvement in the Mode of Tax Collection Administration of the
Self-employed Private Economy and Intensification of Tax Collection on Audit
of Accounts. Tax offices at all levels should take effective measures to
earnestly strengthen tax collection administration of the self-employed
private economy and gradually and comprehensively enforce tax collection
on audit of accounts among households of the self-employed private economy
with fixed sites for business operations to realize the legalization and
standardization in tax collection administration.

    As of April 1, 1997, self-employed industrial and commercial households
with a certain scale of operations and privately-operated enterprises taxed
at regular intervals in fixed amount, enterprises leased and contracted by
individuals for operations shall establish comprehensive accounting books
pursuant to the uniform state accounting rules, and tax offices shall enforce
tax collection on audit of accounts with respect to them. Business households
can establish accounting books on their own. They can also employ intermediate
agencies of society to establish accounting books as agents. In specialized
markets with the requisite conditions, fixed business households engaging in
commercial wholesale or retail should use tax-controlled tills as prescribed
while establishing accounting books, their purchase expenses can be listed
in expenditure in pre-income tax instalments.

    To prevent tax money loss and ensure tax revenue, in the initial stage of
establishing accounting books, the mode of tax collection on audit
of accounts in combination with tax collection at regular intervals in fixed
amount can be adopted as a transitional measure.

    For all categories of business households taxed at present at regular
intervals in fixed amount, the fixed amount shall be adjusted in the light of
their operations, and administration in fixed amount shall be strengthened
with respect to the few business households that need to be taxed at regular
intervals in fixed amount. Both business households of taxation on audit of
accounts and business households of taxation at regular intervals in fixed
amount should declare and pay tax truthfully according to law,
non-declaration, untruthful declaration or failure to declare the adjusted
fixed amount exceeding a certain range of the fixed amount, once investigated
and verified, shall be handled as tax evasion.

    State tax bureaus and local tax bureaus in all localities should jointly
supervise and urge business households of self-employed private economy to
establish accounting books. State tax bureaus shall be responsible for
the supervision of establishment of accounting books by business households
that pay value-added taxes and consumption taxes; local tax bureaus shall be
responsible for the supervision of establishment of accounting books by
business households that pay sales taxes.

    3.Business Households of Self-employed Private Economy Should Have a
Correct Understanding and View of the Significance of Establishment of
Accounting Books and Taxation on Audit of Accounts. Establishment of
accounting books is the necessity of the operators in strengthening
self-management and expansion of operations and it is also the basis of tax
declaration and payment in accordance with law. Therefore, business households
of self-employed private economy should enthusiastically, actively and
seriously establish accounting books and use tax-controlled tills in
accordance with the requirements, accept the supervision of tax organs, and
truthfully declare operational status at tax organs in support of the work of
taxation on audit of accounts carried out by tax organs. Associations of
self-employed labourers and associations of privately-operated enterprises
should actively cooperate with people's governments and tax organs at all
levels in stepping up publicity and education and assist business households
of self-employed private economy in the establishment of accounting books.

    4.All Departments Concerned Should Support and Closely Cooperate with
One Another. Strengthening of taxation administration of self-employed private
economy and intensification of taxation on audit of accounts involve many
sides and have an integral nature, it is therefore a difficult job. The
State Taxation Administration must, in combination with the deepening of
reform in taxation administration, earnestly do this job well in organization,
guidance, supervision and inspection. All departments concerned should support
and closely cooperate with one another to ensure the smooth progress of this
work.

    Organs of industry and commerce administration and tax organs should
jointly organize forces to conduct a sorting out with respect to the nature
of industry and commerce registration of the enterprises in accordance with
the capital composition and operational status of the enterprises. In the
meantime, a joint sorting out and inspection shall be conducted on the status
of the issuance of business licences to business households of self-employed
private economy and taxation registration. Those business households that
fail to establish accounting books as prescribed or establish falsified
accounting books shall be directed to suspend operations for consolidation
and make corrections within the specified time period; those that fail to
make corrections on expiry of the time period shall be revoked of their
business licences and their qualifications for operations nullified; those
that evade taxes with establishment of falsified accounting books
constituting a crime shall be transferred to judicial organs for handling.

    Financial departments should strengthen cash management and handle
cash acceptance and payment in accordance with state provisions on cash
management; they should clear up and prohibit multiple opening of accounts.
With respect to the business households that commit acts of tax evasion,
all financial units should, pursuant to the provisions of the state laws,
actively assist tax organs in the inspection of their deposit accounts,
provide relevant information and take timely measures to secure the taxation
and enforce measures of forcible execution according to law.

    Public security organs at all levels should seriously investigate and
deal with tax-related cases and cases of encircling and attacking or forcibly
entering into tax organs or beating and slandering tax officials. Those who
turn down or obstruct tax officials in execution of their official duties and
deliberately disrupt public order in taxation shall be dealt with according
to law.

    5.Achieving Consensus of Views and Strengthening Leadership. People's
governments at all levels should earnestly strengthen leadership in the work
of taxation administration of self-employed private economy and
intensification of taxation on audit of accounts, support and assist tax
departments in the resolution of difficulties and problems coming up in the
work. In the meantime, they should proceed from the overall situation,
resolutely implement various rules of the State Council concerning curbing
arbitrary collections of fees, unjustified financial levies and indiscriminate
fines, conduct a sorting out and consolidation in collection of fees and
earnestly alleviate the nontax payments of business households of
self-employed private economy so as to ensure the smooth implementation of the
work of taxation on audit of accounts.