Up to 20 regional tax bureau officials from Hainan Province have been arrested on corruption charges for allegedly providing tax exemptions for unqualified real estate developers.

The officials include Wang Zhong, former deputy chief of Haikou taxation bureau in the provincial captial, according to the latest issue of Caijing, a finance magazine.

"The regional tax bureau officials have either left or been arrested," an insider was quoted as saying by the magazine. The arrests were the result of an investigation by the Central Commission for Discipline Inspection and the prosecutor's office, it said.

The real estate consisted of unfinished properties left over from the property boom of the 1990s. In order to deal with the huge debt linked to such projects, the Central Government implemented a policy to reduce or exempt developers from business taxes in order to ease development costs.

A total of 880 million yuan (US$117 million) worth of sales tax and 300 million yuan in contract tax were exempted in Hainan Province, according to Caijing. Prosecutors in May charged five urban planning officials on similar tax allegations. Verdicts have not yet been announced.

(Shanghai Daily December 30, 2008)