$46 million fine on actress Zheng Shuang’s tax fraud in line with common prosperity goal as China tightens regulation on tainted celebrities
Published: Aug 27, 2021 10:11 PM
Zheng Shuang Photo:VCG

Zheng Shuang Photo:VCG

China ordered actress Zheng Shuang to pay 299 million yuan($46 million) in fines, taxes and penalties for tax evasion on Friday, a move aimed at tightening tax supervision of high-income celebrities and ensuring tax fairness for society, Chinese observers said, noting the tax supervision will be further tightened as China ushers in common prosperity, a national goal. 

The action was interpreted as part of actions to enhance regulation of the high-earning entertainment industry and several entertainers who have violated the law or have moral taints were not allowed spotlight and got their works removed from online platforms.   

Among them were Chinese billionaire actress Zhao Wei, Chinese-Canadian pop idol Kris Wu, who was detained by Beijing police for suspected rape, and actor Zhang Zhehan, who came under fire for visiting Japan's notorious Yasukuni Shrine, and TV host Qian Feng who was accused of rape with the case still in investigations. 

Zheng, whose reputation collapsed after she was accused of abandoning her two surrogate babies in the US earlier this year, was ordered by the Shanghai Municipal Tax Service to pay fines for tax evasion of nearly 220 million yuan, and taxes of 72 million yuan. 

The National Radio and Television Administration stated that the TV drama "A Chinese Ghost Story," which Zheng starred in, was banned from airing and all broadcasters and video service platforms are prohibited from inviting Zheng to shows. The current shows which Zheng participated in were asked to stop broadcasting. 

TV dramas Zheng acted in have been removed from major video platforms. 

The administration said it holds a zero-tolerance policy on tax evasion and high price payments in the film industry which violate laws and disturbed the industry's order. 

According to the Shanghai tax authority, Zheng received 160 million yuan to star in the TV drama "A Chinese Ghost Story" through tax evasion, signing fake contracts and submitting counterfeit documents to the tax authority. 

The State Taxation Administration said in a statement on Friday that tax departments in recent years continued to tighten tax supervision to high-income groups and high-risk industries, including the film industry. The tax authority will closely cooperate with departments in film and broadcasting to strictly crack down on malicious tax evasion. 

Beijing Culture, producer of Zheng's work, was warned and fined 600,000 yuan on Friday by the Beijing securities regulator for false transfer of its investment shares in TV dramas. 

Famous actress Zhao Wei's name was removed from many of the works she starred in on major Chinese video platforms.

Musician and show host Gao Xiaosong's work, Xiaosong Pedia, was removed from iQiyi on Friday, and the reason was yet to be announced. Gao had served in prison for six months due to drunk driving in 2011. 

Ye Qing, a professor at Wuhan-based Zhongnan University of Economics and Law, told the Global Times on Friday that punishment to Zheng served as a deterrent to people in the entertainment industry as well as other high-risk fields such as the public sector. 

In 2018, Chinese actress Fan Bingbing was fined 883 million yuan for tax evasion and other offenses. Such supervision will be further tightened with harsher punishments as China marches toward common prosperity, the expert said. 

The 10th meeting of the Central Committee for Financial and Economic Affairs last week stressed efforts to promote common prosperity in the pursuit of high-quality development and coordinate work to forestall major financial risks.

Ye said that second income distribution was the key to common prosperity. It's significant to ensure tax fairness and justice for public and timely punish those evading tax for illegal gains. 

Not just celebrities, government officials and civil servants are also one of the high-risk sectors that may involve large amounts of tax evasion or illegal gains through bribes, and supervision of these sectors needs also be tightened. 

Economic problems are just one area that celebrities will be put under scrutiny. Since words and deeds of public figures not only reflect their own values, but also subtly influence others' thoughts and behaviors, especially their young fans, celebrities' improper or lawbreaking deeds even have a negative effect on social atmosphere, observers said. 

Ye said it's urgent for film academies to include law and history education to their students, not just acting skills.