China’s Taxman Is Going For The Big Guns
(Photo by Salah Malkawi/ Getty Images) China's tax authority is cracking down on foreign investors and wealthy Chinese
China is facing tough economic times — we all know that. Now the tax authority is stepping up their game to try to bring in new revenue, which is down 1.6 percent from last year, The Wall Street Journal reported.
GDP growth in China is at a five-year low, real estate is crumbling, and demand is falling across the board. But incomes are still growing, according to the Journal.
Tax bureaus want in on that, so they’re starting to look beyond traditional salaried workers for revenue — chiefly at super-elite stock market and foreign direct investors, the report said. (Most Chinese workers are already taxed on a regular basis with payroll deductions, it said.)
This could have harmful affects on consumer spending. China is still a country where most money is spent by the wealthy.
On top of China’s local business elite, the taxman is also eyeing wealthy Chinese abroad, according to the report. Like in the U.S., Chinese policy is to tax all citizens, no matter where they live in the world. Except that they haven’t been doing a very good job of it so far.
Within China, they’re also looking to hit foreign multinationals and their employees. The government may even start restricting tax-evading foreigners from leaving to the country until they’ve coughed up, the Journal reported.
Not the warmest of welcomes to foreign investors. Some have already started to pack their bags and leave. Just look at Macau, the Las Vegas of China, where casino revenue is expected to fall by 25 percent this month.
Fun’s over, guys.
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