Chinese legal experts have said the hefty fines issued to actress Fan Bingbing underline a resolve to fight tax evasion and healthily develop China's film and TV sector.
China's tax authorities on Wednesday made public the results of an investigation into Fan's tax evasion case, one of the largest of its kind in years.
Investigators found that Fan had evaded about 7.3 million yuan (1.07 million U.S. dollars) in personal income tax and business taxes during her work on the Chinese film "The Bombing."
Fan and firms of which she is legal representative also have tax arrears amounting to 248 million yuan, of which 134 million yuan was evaded.
The actress was ordered to pay taxes and fines worth more than 800 million yuan. And she will face criminal investigation if she fails to comply on time.
Shi Zhengwen, a tax law specialist at China University of Political Science and Law, said contract fraud was an issue that has attracted strong public complaints in recent years.
The punishment is severe but matches the illicit acts, Shi said, adding that potential tax evaders should be warned.
"The case sends a strong warning to those who flout the tax law and is a good lesson on tax compliance to the public," said Zhang Bin, a researcher with National Academy of Economic Strategy under Chinese Academy of Social Sciences.
He said public awareness on tax payment was key as China deepens reform to improve its taxation systems.
People from the film and TV industry, meanwhile, said the case would promote the healthy development of the sector.
Lin Yongjian, deputy head of China Television Artists Association, said literary and art circles supported the penalty.
"Film stars make easy money. With the fame and wealth, they choose not to fulfill their tax obligations. It is not ok," he said.
Lin said he believed the case would help promote fair and reasonable income distribution in the sector and correct wrongs in the industry.
A sector-wide overhaul of exorbitant casting fees, contract fraud and tax evasion has been ongoing since late June.
The State Taxation Administration said it would soon launch a new campaign to regulate tax payment in the film and TV industry.
It said film and TV firms as well as relevant personnel that undergo self-examination and make remedial payments to taxation authorities before Dec. 31 will be exempt from administrative punishment and penalties.
Zhong Chengxiang, head of China Literature and Art Critics Association, urged artists and entertainers to abide by laws and meet public expectations by raising their moral integrity and the artistic appeal of their work.
