SMALL FRY

People who owe $15,000 in taxes won’t be able to leave China

Big-time tax dodger.
Big-time tax dodger.
Image: Photo by Vianney Le Caer/Invision/AP
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It’s not just Fan Bingbing who China is after.

After the country’s biggest actress was ensnared in a crackdown on tax evasion—resulting in a 890 million yuan ($130 million) bill and a public apology—it’s now got its sights on much smaller fish.

China’s State Administration of Taxation is lowering the threshold of outstanding taxes that land individuals and companies on its blacklist to 100,000 yuan ($14,500) from 1 million yuan starting Jan. 1, according to a new policy document (link in Chinese).

In China, an estimated 28 million people, or just 2% of the population (paywall), pay taxes. But the country is embarking on a major tax overhaul—which state mouthpiece People’s Daily characterizes as the most significant tax reform in decades—that’s focused on recouping owed taxes, rather than increasing its tax base.

A recent revision to the tax code, for example, will make it easier to tax the global income of foreign workers (paywall)—not just their domestic earnings—if they reside in mainland China for more than 183 days, a move that’s drawing resistance from the US and Hong Kong.

The tax agency’s blacklist, intended to name and shame offenders, publishes the names, gender, and ID card numbers of defaulters. In the case of companies, the information includes the taxpayer registration number and addresses of the firm’s legal representative and person in charge, reports state media Global Times. The blacklist, which is shared with other regulators, also keeps offenders from leaving the country.