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A new mechanism to supervise income tax payments by foreigners in the Guangzhou Development District has become so efficient that revenue from personal income taxes surged in the first 10 months of 2006.

The district taxation bureau has collected US$338 million (US$41.68 million) from international employees in the first 10 months of this year, a 30 per cent increase year-on-year.

Guangzhou Development District is home to 1,844 foreign-invested enterprises employing 3,373 international employees.

In May, the Guangzhou Local Taxation Bureau directed all businesses employing foreigners within the city to create a file for every international employee, said Zheng Xiaowu, an official with the district local taxation bureau.

The software-based file system provides tax collectors with immediate access to detailed information on personal income tax payments by foreigners, allowing for easy decisions on whether people are paying the appropriate amount of tax, said Zheng.

He added that since the system had been set up, his bureau had detected about 40 foreigners who had tried to evade paying personal taxes. Statistics indicate that only about a third of the foreigners working in Guangzhou had declared income taxes as required prior to the mechanism being put into effect.

(China Daily December 14, 2006)