Recently, media reports stated that Ningbo uncovered a major case of tax refund fraud for exported clothing and destroyed a tax fraud criminal gang involving 17 cities in 8 provinces, including Zhejiang and Jiangxi. The case involved exporting goods worth 137 million yuan and defrauding the state of 22 million yuan in tax refunds. In fact, there have been endless cases of tax fraud using the export tax rebate policy. What are the reasons?
The principal criminal was sentenced to 11 years in prison
Reports stated that in June 2019, according to the General Administration of Customs, the State Administration of Taxation, and the Ministry of Public Security , the People’s Bank of China jointly issued case clues, Ningbo Customs, Ningbo Municipal Taxation Bureau, Ningbo Municipal Public Security Bureau, and the Ningbo Central Branch of the People’s Bank of China jointly established the “P14” task force to combat export tax refund fraud, and established the main criminal suspect Yang, a native of Ningbo, used this as a breakthrough point to investigate the case.
After four months of investigation and evidence collection, the task force finally found out that the criminal gang headed by Yang actually controlled Nanchang, Jiangxi Four garment companies falsely issued special value-added tax invoices, illegally purchased export cargo information from freight forwarding companies in the name of Ningbo D Foreign Trade Company, purchased foreign exchange through illegal channels, and defrauded the state of 22 million yuan in tax refunds.
In August 2020, the Ningbo Beilun District People’s Court ruled in the first instance that Ningbo D Foreign Trade Company was guilty of defrauding export tax refunds and falsely issuing invoices, and was sentenced to a fine 22.1 million yuan; the principal culprit Yang was convicted of defrauding export tax refunds and falsely issuing invoices, and was sentenced to 11 years in prison and fined 22.1 million yuan.
Coincidentally, a few months ago, the Guangzhou police also uncovered a major case of export tax rebate fraud. Criminals mistook a garment factory for a “Bunker”, while hiring workers to produce, falsely issued value-added tax invoices exceeding 10 million yuan. Such twists and turns are just to defraud high export tax rebates.
In this case, the police dug deep into the clues of a case of falsely issuing special value-added tax invoices. We eliminated a gang that specialized in fraudulently issuing special VAT invoices and forging goods transaction records to defraud national export tax rebates. Seven suspects were arrested and it was discovered that the gang had issued more than 500 special VAT invoices, involving a total amount of up to 50 million yuan. Yuan, defrauding more than 7.3 million yuan in state taxes.
Based on Articles 204 and 200 of the “Criminal Law of the People’s Republic of China” Article 5 stipulates: Anyone who defrauds the state of export tax refunds by false export declarations or other deceptive means, and the amount is particularly huge or there are other particularly serious circumstances, shall be sentenced to fixed-term imprisonment of not less than ten years or life imprisonment, and shall also be sentenced to not less than one time and five times the tax defrauded. fines or confiscation of property. Anyone who falsely issues special value-added tax invoices or other false invoices used to defraud export tax refunds or tax deductions, if the amount of falsely issued tax is huge or there are other particularly serious circumstances, shall be sentenced to fixed-term imprisonment of not less than ten years or life imprisonment.
Increasing the export tax rebate rate causes negative problems
The export tax rebate policy has always been an important trade promotion policy in our country, especially after the reform and opening up. With the reform and adjustment of my country’s tax system, it has played a role in promoting fair trade and stimulating the growth of enterprise export trade. At the same time, with the needs of my country’s economic development in different periods, the export tax rebate rate is raised as an incentive policy, and there are management loopholes in the implementation of this policy. Some companies are driven by interests to use the export tax rebate policy to obtain additional income, and there are Some negative problems and new features have emerged:
First, export tax rebates are seriously defrauded.
Data from the State Administration of Taxation show that in the first half of 2018 alone, 56,300 companies across the country were investigated for tax fraud and false start-ups. During the inspection, a total of 4.8 billion yuan in tax losses was recovered, and 2.27 million special value-added tax invoices and other deductible vouchers were found to have been falsely issued and accepted, with the tax amount involved reaching 43.4 billion yuan. Moreover, among the 58 cases of fraudulent export tax refunds after the 2008 financial crisis published in the information bulletin board of the State Administration of Taxation on major tax violations, 14 cases involved fraud of more than 10 million yuan. Both the number of export tax fraud cases and the amount involved have reached a shocking level.
Second, there are huge differences in the trade data reported by China and its trading partners. The trade volume with some countries or regions has even reached of more than 20%.
The means of export tax fraud by enterprises are complex, diverse and highly concealed, which mainly include forging export documents, Various export tax fraud measures include false reporting of unit price or quantity of export commodities, false declaration of commodity categories, false issuance of special value-added tax invoices, etc. The negative impact of export tax fraud on China’s export trade is obvious. In order to obtain export tax rebates, many companies forged export data and directly counted them under export items, which inflated the export scale of Chinese companies.
At the same time, it is worth noting that the number of export companies in China With so many industries and wide distribution, export companies’ tax fraud methods are complex and varied, which directly makes it more difficult for customs, taxation and other administrative departments to supervise export tax fraud.
Export tax fraud by Chinese enterprises has become a common phenomenon. Due to the illegality of tax fraud, tax fraud by enterprises is essentially difficult to observe. , especially the various tax fraud methods used by Chinese export companies, which have increased the actual difficulty in measuring the degree of tax fraud.
In short, while affirming the positive effects of this export encouragement policy, we must also be alert to the potential drawbacks of policy implementation.</p
