Law and politics the real drama here

Editorial | Mary Ma 5 Oct 2018

Chinese mega star Fan Bingbing's plight is revealing.

Once a princess adored by millions of fans in China, the acclaimed "empress" in the television series, Empress Wu Zetian, broke down in tears to confess wrongdoings on taxes, in her first public appearance since July.

Mainland producer and TV host Cui Yongyuan set off the tax storm in May with his revelation of the existence of so-called "yin-yang contracts" in the film industry that landed Fan in trouble. By July, Fan had completely vanished from public view.

"Yin-yang contracts" refer to the common practice of writing two contracts for one job - one stating an actor's real earnings, and another understating the amount to cheat the taxman. It's said that after the scheme was exposed, Fan consulted a fortune teller in Shanghai and was detained while shopping.

Tax authorities said they have now established Fan and her companies had evaded 255 million yuan (HK$290.8 million) in tax and ordered her to cough up 884 million yuan, including interest and other penalties.

That's a jaw-dropping amount. But the 37-year-old actress is actually lucky, because the fine could have exceeded that, and - most crucially - she is spared from jail, as mainland criminal law provides for up to seven years imprisonment for tax offenses involving large sums.

In comparison, actress Liu Xiaoqing, who played Empress Wu Zetian in the mid-1990s in another TV series, was less fortunate. In 2002, she was accused of evading 20 million yuan in tax and spent 422 days in Qincheng Prison, well-known for incarcerating prisoners deemed dangerous to national security, or disclosing state secrets.

Perhaps, 255 million yuan has since ceased to be viewed as a significantly large amount in light of corruption cases involving sums many times higher.

A few messages can be drawn from Fan's verdict. Now it's clear why it has been possible for artists to amass so much wealth so quickly.

Fan, despite her unparalleled fame, could not be the only one digging up as much gold.

If the ax could fall on someone as iconic as Fan, the same would occur to anyone in the entertainment industry. It's a safe bet that others are shaking in their boots and reviewing their tax positions to turn part of of their wealth back to the state.

Businessmen, likewise, will also feel the pressure.

In her apology, Fan said she had been suffering unprecedented pain, and was ashamed of what she had done. Expressing complete willingness to accept all punishments, she pledged to follow the order and did her best to "overcome difficulties, raise funds, pay taxes and fines."

She also had this to say: "Without the good policies of the party and the state, and without the love of the people, there would be no Fan Bingbing."

It was a standard confession. In extracting the admission, Beijing not only plowed a large sum in missing tax revenues back to state coffers, it also warned the elite class - however high they've climbed the social ladder amid the economic boom - to set examples as desired by the government.

Fan's case is about law and politics.

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