Stars should stop ‘act­ing smart,’ start pay­ing tax

Global Times - Weekend - - OPINION - By Yu Ning The author is a re­porter with the Global Times. opin­ion@glob­al­times.com.cn

Chi­nese TV an­chor Cui Yongyuan is being hailed as a hero for ex­pos­ing al­leged tax eva­sion in China’s en­ter­tain­ment in­dus­try.

The dust was kicked up last week when Cui pub­lished two posts on his Sina Weibo ac­count, the Chi­nese equiv­a­lent of Twit­ter. In the first post, Cui posted photos of a con­tract be­long­ing to ac­tress Fan Bing­bing, best known for her role as Blink in the Hollywood movie X-Men: Days of Fu­ture Past.

Ac­cord­ing to the con­tract in which the ac­tress’ name could be seen, Fan would be paid 10 mil­lion yuan (about $1.56 mil­lion) for an act­ing job. But in the sec­ond one, Cui posted a pic­ture of what seems to be another con­tract – no de­tails were shown, but he claimed it was a dual con­tract re­lated to the first one and had a sign­ing amount of 50 mil­lion yuan.

Although Fan was not named in the post, spec­u­la­tion swirled that she was us­ing sep­a­rate agree­ments to avoid pay­ing tax.

Cui later told me­dia the sec­ond con­tract did not be­long to Fan, but in­sisted dual con­tracts did ex­ist in the en­ter­tain­ment busi­ness. “I have a drawer full of con­tracts. The gov­ern­ment should tighten reg­u­la­tions for show busi­ness,” Cui as­serted. He claimed a pair of dual con­tracts he has in­volve as much as 750 mil­lion yuan.

Dual agree­ments, also called “yin-yang con­tracts,” are a com­mon prac­tice to avoid pay­ing taxes, in which high-in­come earn­ers se­cretly pocket the money from a high­er­value con­tract but sub­mit the lower fig­ures to au­thor­i­ties.

Cui’s reve­la­tions have sparked an on­line storm and gar­nered ex­ten­sive sup­port from the public. “How can they on the one hand evade taxes while on the other pocket huge ben­e­fits?” a ne­ti­zen asked.

Recent years have seen in­creas­ing public dis­con­tent with the stun­ningly ex­or­bi­tant re­mu­ner­a­tion paid to stars in the en­ter­tain­ment in­dus­try. Chi­nese au­thor­i­ties passed guide­lines last year to cap ac­tors’ pay­checks at 40 per­cent of the to­tal pro­duc­tion cost and man­dated that lead­ing ac­tors’ salaries can­not ex­ceed 70 per­cent of the cast­ing bud­get. But the prac­tice of “yin-yang con­tracts” has ren­dered the reg­u­la­tions mean­ing­less. Cui’s claims have given an idea that many in the en­ter­tain­ment busi­ness have un­scrupu­lously tram­pled tax law. It is a mat­ter of so­cial jus­tice and rule of law. Celebri­ties, as a high-in­come group un­der the spot­light, should be par­tic­u­larly self­dis­ci­plined. To­day’s su­per­stars, who have won fame and sta­tus through years of ef­forts, should cher­ish their hard-won pop­u­lar­ity and ful­fill their obli­ga­tion to pay taxes. Those evad­ing taxes, no mat­ter how fa­mous, should be sub­jected to op­pro­brium. Amid public up­roar, the State Ad­min­is­tra­tion of Tax­a­tion ordered the rel­e­vant bureaus to “in­ves­ti­gate and ver­ify on­line al­le­ga­tions that TV and film ac­tors evaded taxes by sign­ing two con­tracts,” adding that any­one found guilty of break­ing the law will be “pun­ished ac­cord­ingly.” An im­par­tial and thor­ough in­ves­ti­ga­tion into the prac­tice is ex­pected. China has planned to de­velop the cul­tural in­dus­try into a pil­lar of the na­tional econ­omy by 2020. It’s im­per­a­tive to reg­u­late the dis­torted and scan­dal-rid­den busi­ness. Strong ac­tion is needed to pull it back onto the right track.

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