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Tax scams unfolded
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FOUR people have been executed in east Guangdong Province for tax fraud as the nation braces for further shocks as details emerge of the vast tax scams, China's worst ever, that became endemic in the Chaozhou area in the past few years.
Lin Sucun, Huang Wenlong, He Tao and Huang Zhenchi were put to death after the Higher People's Court in Guangdong Province issued execution orders on Friday.
The four executed were all private businessmen who had set up front companies that cheated the State out of export tax rebates by issuing phoney tax invoices.
Also announced on Friday by the Shantou Intermediate People's Court were death sentences for three others linked to the scams.
So far 18 cases of tax fraud involving fake value-added tax invoices and fake export tax rebate receipts have been completed with 40 people convicted and punished.
Another 167 people are still under investigation in 59 other cases that mainly occurred in the cities of Chaoyang and Puning.
Some 100 groups of crooked businessmen arrested in the crackdown have hidden or bilked the State of almost 4.2 billion yuan (US$504 million) in taxes in less than two years, from 1999 to June 2000.
The cases also involve local tax and government officials. Ding Weibin, the Party chief of Puning City, and Lai Zhencai, mayor of the city, were both arrested for allegedly taking bribes of almost one million yuan from the scam operators.
Ma Lin, deputy director of the crackdown task force under the State Council, told reporters that initial statistics have shown about half of the government revenues in the two cities were related to the bogus tax-rebate operations.
Last August, the Central Government dispatched a 300-member investigation team to the two cities to launch a crackdown which has so far uncovered bogus value-added tax invoices at the amount of 32.3 billion yuan.
On March 2, seven people involved in the case were sentenced to death including at least two of those executed on Friday.
The tax fraud began as early as 1989 and took off in earnest in 1994 as local officials began condoning the method as a means to raise local revenues.
“Our policy was that if you made money, the town developed. So let's do anything that made money," former head of Liusha Township in Puning, Huang Shaozhuang, was quoted by Xinhua as saying while being detained for investigation.
Huang's township government took out loans from banks to be used by its 19 paper companies as prepaid tax money that was required to be paid before the tax rebates could be claimed. The firms took in some 50 million yuan in false export tax rebates in only five months in 1999.
To encourage the illegal industry, Huang also called upon joint conference participated by the fiscal and tax departments of the town to openly formulate five policies supporting export tax rebate scams.(SD News)
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