Editorial

The exorbitant salary of celebrities in China’s entertainment sector has always been a source of public complaints, not only because it reflects the widening wealth gap in society, but also because such income has often been made illegally, through “hidden industry rules”. That’s why the announcement by the State Administration of Taxation that it is conducting a thorough investigation into alleged tax evasion by a famous actor has attracted much attention.

As the studio concerned is registered in Wuxi, Jiangsu province, the local tax authority is conducting the inquiry.

The move comes after two contracts were posted online detailing the terms and conditions for an actor to work on a movie. One was said to be the real contract, and the other with a lower payment and perks was alleged to be for tax purposes. Such “double contracts” have long been used in the industry, the poster claimed.

It will take time for the investigators to find out whether the film star has evaded paying tax, a criminal charge that the studio has denied. But throughout the investigation, the actor will be treated the same as anyone else, the administration said. Since everyone is equal before the law, the star’s celebrity status will not influence the outcome, and if any actions are found to have broken the law, the relevant parties will be punished.

The administration is already looking at tax avoidance in the film industry, and it has said it is strengthening its supervision.

The incident has once again put the spotlight on movie stars and the film industry. For despite the Chinese film industry’s boom in recent years, with its box office set to become the world’s largest, the quality of most movies still leaves a lot to be desired.

The high payments for on-screen talent have been part of this problem, since investors, in order to make profits, tend to rely only on the A-list stars with box office appeal to guarantee a return on their investments. This has created a soaring cycle of higher payments for stars at the cost of the money spent on other aspects of production, such as scriptwriting, production, editing, sound and music.

The fight against unreasonably high payments must continue for the film industry to continue to prosper and yield more quality films. And the scrutiny of contracts and income must be carried out to ensure those in the industry pay tax on their full incomes according to the rules.