Why doesn't China strictly investigate taxes? Are we really afraid of the closure of small and medium-sized enterprises?

My father is an accountant, and my mother is an old tax collector who has worked in the first-line inspection department of the county State Taxation Bureau for decades. I don't know this kind of problem professionally, but I have heard of it since I was a child, and I have also heard of the tax situation at the county and city levels in China.

First of all, let me talk about the situation here at the tax bureau. As far as my mother's unit is concerned, China's tax revenue is "task-oriented"-this system determines that the process of tax implementation is bound to be inconsistent with normal social and economic development.

According to our understanding, the regional economic situation is good → the development of enterprises is good → the profits of enterprises are high → the taxes are high. In other words, how much tax can be collected has nothing to do with your tax authorities objectively, but is only a reflection of the development of the economic situation. More tax collection means a good economic situation, while less tax collection means a poor economic situation. As long as the tax authorities enforce the law impartially and act according to the rules, the amount of money collected has nothing to do with the ability of office workers. But the disadvantage lies in this "task system": how much tax will be collected this year, just as our college entrance examination sprint swearing-in meeting sets goals and tasks, so should the superior leaders. What do you think are "audit experts" and "audit pacesetters"? There is also a comparison between tax authorities at all levels. In the early years, they also engaged in things like floating red flags.

In the financial tsunami in 2008, small and medium-sized factories and enterprises in our county suffered losses visible to the naked eye, but even in this case, the tax authorities seem to live in a magical real world and are still "warmly celebrating that our county has overfulfilled the XX tax task" (of course, according to the situation in recent years, it is impossible to complete the tax task assigned by the superior). Therefore, this has caused a frontline inspector like my mother to first consider "how much money can be collected", followed by "how to collect it and with whom" and finally "how much money should be collected". Moreover, the most important thing is to receive the most money in a limited time and ensure that you can receive more money next year.

You may think it's a little circuitous, and you may think it has something to do with the taxation of small and medium-sized enterprises. Let me put it this way. As long as there is a problem with the starting point, there will be a problem with the foothold when implementing it.

Secondly, from my dad's point of view. To tell the truth, at least as far as I know, the accounts of domestic small and medium-sized enterprises are really a muddled account. He is an agent accountant, and his clients are small and medium-sized manufacturing enterprises. In terms of enterprises, of course, the book profit is as low as it can be, and many enterprises that have been losing money for more than ten years have been arrested (because of my father's work, I always thought that all enterprises would underreport their income since I was a child, and I learned financial accounting in college before I knew that enterprises would misrepresent their interests for other purposes). In fact, this is not a false account. Due to the large cash receipts and payments of small and medium-sized enterprises, financial management and supervision are not in place. Many small and medium-sized enterprises are husbands as bosses, wives or other reliable relatives as cashiers, and the original materials and vouchers handed over to their fathers are not perfect, which has a great degree of manipulation within the legal scope. So according to my dad's words, as long as you are willing to check the accounts of SMEs to the end, you can find out all the problems. Enterprises, accountants and tax bureaus all know about this, but what can you do if you investigate thoroughly, not to mention the workload of many small and medium-sized enterprises in the jurisdiction? Each enterprise has paid more than 350,000 yuan, which is simply a drop in the bucket in the face of hundreds of millions of tax collection tasks. Moreover, auditing accounts is not a slow job, time is tight, tasks are heavy and manpower is small, and it is impossible to thoroughly investigate. Pick a few unlucky ones to be typical, and don't offend others. Even if he is punished for bankruptcy, the hundreds of millions of tasks shouldered by his own inspection team will not help much, and it will kill a tax source for next year. So, many years ago, my mother and her company began to implement the tax policy of "grasping the big and letting go of the small". For big taxpayers, that is rude and must not be sloppy. Although it is rude to collect money, big companies are the god of wealth. Every year, the tax task assigned by the superior depends on these gods of wealth, so we should collect money with malicious hands and feed with good students. Even if problems are found, most of the time, it is a kind negotiation, a symbolic punishment, and dare not really touch the enterprise (on the one hand, there must be a good relationship behind the local enterprises, on the other hand, no one wants to offend the god of wealth from cutting off the financial path.

I have always felt that the most ridiculous thing for the tax authorities in this process is to issue banners or other commendations to large taxpayers, which is obviously for the uncle. But when auditing accounts, we should be firm and merciless-the main force of auditing is the thorough investigation of big companies, which is like a game. After all, the more problems we find, the more difficult it will be to negotiate. My mother's various "inspection experts" and "business pacesetters" are all like this. As for small and medium-sized enterprises, the reported accounts are losing money every year, and the boss is crying for poverty every year, but everyone is from China, so don't pretend to be a foreign guest with anyone. Everyone knows the actual situation. Under normal circumstances, as long as it is not out of line, the tax authorities will not conduct a thorough investigation. However, when the new official takes office, the higher authorities scrutinize it, and the assessment pressure in various counties and cities is great. Tax collectors turn a blind eye to these small and medium-sized enterprises, whether they pay taxes that they missed before, pay taxes in advance in the future, or pay fines indiscriminately. In fact, they are very sure that no matter how much you pay, you will pay less. Small and medium-sized enterprises are generally self-aware and willing to pay taxes and fines within their tolerance. This is a win-win situation.