By Zhang Lifan
The concept of the fapiao (invoice) arose with consumption in modern society. In the Chinese mainland, where the free spending of public money by officials is a common practice, government-issued invoices also display Chinese characteristics.
With a little maneuvering, all kinds of private expenses can be covered by public money, even sex services. This “hidden rule” is apparently world-famous. No wonder the prostitutes abroad reportedly smile and wave at Chinese tourists, calling out “You—fa—piao!” (invoice available!)
In Chinese, the word fapiao was first used in the Ming Dynasty (1368-1644). The cabinet would review the officials’ reports for the emperor and write down comments on a slip of paper, which was called a fapiao. In business transactions, it originally meant “bill of delivery” and was called a fafeng.
The exact time of its appearance is undetermined. In the Qing Dynasty (1644-1911) the word fengshang (submission) was written on the fapiao. Serial numbers and regular columns were printed on the fapiao, though formats varied. Fapiao still didn’t have a uniform format during the years of the Republic of China (1911-1949), but stamps were glued to it for tax purposes.
From the 1950s to 1960s, invoices in the Chinese mainland were categorized according to industries and usually had slogans on them, emphasizing taxpayers’ obligations rather than rights. The Cultural Revolution (1966-1976) also left its mark: political slogans issued by the nation’s leaders were printed on the invoices. In the 1990s, standard watermark paper was adopted nationwide to produce invoices and regulations were enforced.
Taiwan was the first province to issue standard invoices, including a reward for users. In order to encourage consumers to use invoices and prevent stores from tax evasion, local governments since 1950 started to offer prizes, making the fapiao a type of lottery ticket. In just two years, business tax revenue in Taiwan increased by 76 percent.
Recently, grass-roots charities in Taiwan have set up “invoice donation boxes” in front of stores and called on people to donate their invoices so the charity can claim the prizes and use the money to help the disadvantaged. Both the stores and consumers embraced this measure with great enthusiasm.
Similar invoices are used in the Chinese mainland also. As a result, tax revenue has increased, but most consumers have their eyes on winning the prize rather than donating the fapiao to charity. They are more concerned with backdoor manipulation. Scholars have questioned the fairness of such invoices.
Invoice and receipt are different concepts. But in a country under the rule of law, with an established tax control and accounting system, paying tax without invoices is most natural. Consumers request invoices as legal certificates, not necessarily for reimbursement.
In China, however, most buyers demand invoices to get reimbursement. Sellers trick consumers into taking receipts rather than invoices, claiming that they’ve “run out of invoices” or that issuing invoices would add more taxes.
Every day our cell phones and e-mails are bombarded with ads on “issuing invoices.” They fall into two categories: value-added tax invoices, which can help sellers evade tax, and regular invoices which are best for spending public money. Although the law prohibits it, huge demands have given rise to issuing false invoices, and the underground forging of invoices has prospered.
In a country that is under the rule of law and that follows the tradition of a social contract with its citizens, with rights come obligations.
In a society that is based on privilege, how can we promote honest business and encourage people to pay taxes according to the law when civil servants squander over 900 billion yuan ($132 billion) of taxpayers’ money every year?
Since the trust is lost and people are only eager to get rich, neither the officials nor the people will take responsibility for this abuse of the fapiao system.
The author is historian. This article was translated by Xuyang Jingjing