Over 500 Chinese actors and other film industry professionals are in the crosshairs of communist authorities as the State Administration of Taxation pursues an ambitious campaign against tax evasion.
As a result of economic downturn, Chinese authorities at the central and regional levels face chronic shortage of funds. The recent crackdown on tax evasion among wealthy individuals such as Fan Bingbing and other actors, as well as recent tax reforms that increase government revenue, have been widely perceived as emergency measures by the Chinese Communist Party to boost its coffers.
The first phase, to be completed by the end of this year, requires all actors to calculate their taxes paid and proactively pay the overdue amounts. The second phase is the questioning process to be completed by Dec. 15, and the third phase involves visits by tax officials to the actors to collect any unpaid taxes. This phase is planned to be completed by March 2019.
Finally, the Taxation Administration will audit prominent actors as well as perform spot-checks on others. This work is to be finished by June 2019.
According to the report, almost all these actors pay taxes via their studios. The Taxation Administration divided the actors into four groups for individual questioning.
After Fan, 17 other superstars were questioned or investigated. Among them was film director and actor Wu Jing.
Wu was reportedly questioned, and is required to pay more than 200 million yuan ($29.17 million) in overdue taxes.
In the second group are 150 actors, of whom 52 are top-tier stars. The third and fourth groups each contain 200 actors.
To pay overdue taxes, each studio needs to calculate their cumulative income over the past three years. Their taxable income is 70 percent of their total income, and a 40 percent tax rate will be applied.