Chinese superstar Fan Bingbing has been fined approximately US$129 million by the communist government for evading taxes. More celebrities are said to be under investigation, with the government keen on ending the tax evasive practices of the entertainment industry.
Fan Bingbing and tax evasion
Bingbing had disappeared for a short period of time during July this year. When she re-appeared in the public sphere in October, it was with an apology for evading taxes. The government imposed a multimillion-dollar fine while allowing her to escape criminal charges.
“I’ve been suffering unprecedented pain recently… I’m so ashamed of what I’ve done. Here, I sincerely apologize to everyone. I completely accept all the penalty decisions made according to law, after the investigation done by tax authorities. I will follow the order, try my best to overcome difficulties, raise funds, pay taxes and fines,” Bingbing said in a statement (BBC).
According to reports, she was involved in “yin-yang contracts,” a practice in which one contract details the actor’s actual earnings while another mentions a lower earning. The latter would be submitted to the tax authorities as the “real” contract, with the result that the actor will only have to pay less tax.
Bingbing is one of the biggest stars in China and had earned close to US$43 million last year. However, news of tax evasion has taken a toll on her popularity, with social media users angry at the star’s behavior. In addition to Bingbing, the Chinese government is said to be targeting about 551 actors on tax issues.
Seventeen Chinese superstars, including actor Wu Jing, was questioned by the government. Wu was the lead of the 2017 blockbuster Wolf Warrior 2 that minted more than US$800 million gross at the box office. He has allegedly been asked to pay about US$30 million in overdue taxes. Chinese television superstar Sun Li and husband Deng Chao are also rumored to have been questioned by the government. They are believed to have coughed up US$36 million in taxes to the authorities.
“In the short term, the talent pool may shrink as local celebrities digest the impact of this financial change to them, and certain campaigns that are currently under negotiation may get postponed,” Jonathan Schenker, CEO of the Shanghai-based celebrity talent management firm Bookmark Entertainment, said to China Film Insider.
A hit to Chinese soft power
The Chinese Communist Party (CCP) is believed to be displeased with the amount of attention that celebrities attract and wanted to curb their popularity. The government recently entered into agreements with the country’s top production houses to reduce the pay of China’s top stars. Media experts predict the crackdown on celebrities to negatively affect Chinese soft power.
“The effort to diminish China’s most popular celebrities to make way for lower-cost, government-approved messaging and entertainers is more problematic. China’s filmmakers, already struggling, will have trouble competing at home, let alone abroad, if they’re forced to use dull, ideologically pure actors and storylines. If China really wants to challenge Hollywood on a global stage, it’s going to have to let its biggest stars shine,” according to Bloomberg.
In September, the communist-controlled Chinese Academy of Social Sciences released an index of top 100 Chinese celebrities, ranked on the basis of their social responsibility. Fan Bingbing was ranked at the bottom.