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Local Prosecutors in China spares small companies from tax evasion lawsuits


People walk by Haihe River in Tianjin, north China, March 27, 2020. (Xinhua/Li Ran)

 Prosecutors in North China’s Tianjin Municipality have spared some companies from tax evasion lawsuits in efforts to sustain their employment and operations during the COVID-19 pandemic.

According to a report from legal media jcrb.com, a total of 20 companies have been spared from such lawsuits. Those companies were accused of tax evasion through fabricating invoices including value-added tax invoices while under immense financial pressure from salary payments and unfilled orders, among other issues. 

Most of the companies were from the IT software and hardware development, military aviation equipment manufacturing and education, and training and consulting sectors, according to the report. They collectively contributed 1,490 jobs and over 34.5 million yuan ($4.9 million) in tax. Most individuals involved had good social credit records and had never been subjected to administrative penalties.

One company director said the decision not to prosecute has been a life saver for his company. Thus far, most of the companies have repaid their taxes. 

To help businesses, particularly smaller companies hit by the COVID-19 crisis, China has been stepping up its policy support. 

The Ministry of Human Resources and Security last Friday announced China has allocated 9.3 billion yuan in unemployment insurance premiums for 2.3 million unemployed people, and another 67,000 jobless migrant workers have received a total of 410 million yuan in temporary living allowances.

The coverage of unemployment insurance benefits by application limits will be scaled up, and online services will be streamlined, according to the ministry.



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