Minister Shi Guangsheng and Vice-Minister Zhou Keren have arranged concrete measures to fight export-rebate fraud, according to a press release from the MOFTEC Monday.

In order to guard against negative influences from the 1997 Southeast Asia financial tumult, China has raised its export tax rebate rate three times since 1998.

The comprehensive rate rose to 14.75 percent in the latter half of last year from 8.29 percent in 1997, statistics from the State Administration of Taxation indicate.

China gave 71 billion yuan (US$8.6 billion) in tax rebates to exporters in the first nine months of this year, up 94.6 percent from the same period last year.

While the increase in tax rebates for exporters has helped encourage the country's growing export industry, it has also allowed for an increase in the number of tax cheats looking to take unfair advantage of the system, Zhou said.

He pointed out that cheating on export rebates does as much damage to the growth of China's foreign trade as smuggling and arbitrage. He urged trade officials to work closely with the central working team and local taxation bureaux to monitor exporters and get them to cooperate.

Companies that are found cheating on export rebates will be punished accordingly, up to the degree of having their rights to conduct import and export business terminated, he said.

In the past, trade administrations did little supervisory work after approving companies to conduct import and export businesses, according to Shi. This has left the door open for manipulation of the rebate system, he claimed.

(China Daily 12/05/2000)