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Total entries in this blog:
Total entries in this category: 51
Published On: Mar 07, 2006 03:02 PM
Total entries in this category: 51
Published On: Mar 07, 2006 03:02 PM
Just Desserts
Last night, Miss Pi took us out to dinner at a very
expensive restaurant.
At the end of the meal, she passed each of us an
official looking slip of paper, which was not our share of the bill, as I
momentarily feared, but a lottery ticket. Since the Chinese love to gamble, and
don't especially care for sweets, I thought that we were being offered these as
an alternative to dessert. That may be partly true, but the complete story is
that the tickets are part of a government plan to collect
taxes.
Cheating on taxes is at least as popular in China as it is in the US. Because restaurants deal in cash, it is easy for restaurant owners to hide their income. And furthermore, restaurants don't always write out formal receipts. So the government has no way of knowing how much money was taken in, and no way of determining how much tax is due.
To ensure that the restaurants pay their taxes, the government now requires them to effectively pay in advance by buying lottery tickets. The restaurants must offer the tickets as receipts to their customers, in an amount equal to the cost of the meal. The cost to the restaurant for the tickets is their tax burden; if the tax rate is 10%, for example, the restaurant pays $10 for a $100 ticket.
It's a simple and foolproof plan: In the interest of increasing his or her winnings, the customer demands tickets equal to the full price of the meal. The restaurant, in order to keep supplying customers with lottery tickets, has to keep buying them from the government, which is essentially the same as paying taxes. The more business they do, the more lottery tickets they must buy, and the more taxes they must pay. The customers' desire to win enforces the government's tax policy. Brilliant!
Schemes like this make me believe that the Chinese government has a sound understanding of economic principles after all.
Cheating on taxes is at least as popular in China as it is in the US. Because restaurants deal in cash, it is easy for restaurant owners to hide their income. And furthermore, restaurants don't always write out formal receipts. So the government has no way of knowing how much money was taken in, and no way of determining how much tax is due.
To ensure that the restaurants pay their taxes, the government now requires them to effectively pay in advance by buying lottery tickets. The restaurants must offer the tickets as receipts to their customers, in an amount equal to the cost of the meal. The cost to the restaurant for the tickets is their tax burden; if the tax rate is 10%, for example, the restaurant pays $10 for a $100 ticket.
It's a simple and foolproof plan: In the interest of increasing his or her winnings, the customer demands tickets equal to the full price of the meal. The restaurant, in order to keep supplying customers with lottery tickets, has to keep buying them from the government, which is essentially the same as paying taxes. The more business they do, the more lottery tickets they must buy, and the more taxes they must pay. The customers' desire to win enforces the government's tax policy. Brilliant!
Schemes like this make me believe that the Chinese government has a sound understanding of economic principles after all.
Posted: Thu - August 28, 2003 at 04:14 AM