Silk Street Market evaded taxes, says ex-general manager

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By Wang Qian (China Daily)
Updated: 2009-08-06 07:46

Foreign visitors shop at the Silk Street Market. [China Daily]

Famous shopping destination Silk Street Market has denied allegations from a former manager that it didn't pay more than 200 million yuan ($29 million) in taxes.

Ex-general manager Wang Zili has sent a letter to central government officials claiming the Beijing market did not pay even 1 yuan in taxes from 2005 to 2007.

"The whistle blowing is revenge by Wang because he was expelled due to his weak management of intellectual property and business," Yu Tanzhen, legal adviser of the market, told China Daily yesterday.

Yu said local tax departments gave the market a break from 2005 to 2008 because more than 30 percent of its employees were laid-off workers and the market welcomes supervision from national watchdogs.

"We do business strictly according to the law and since 2008 we have paid tax every season," Yu said.

The letter was sent on July 23, Wang said, adding that rental income from 2010 to 2011 could reach 400 million yuan.

The letter also said the market always fines workers for numerous reasons.

Booth owners will be fined 100 yuan every time they use toilet paper, and if their children push elevator buttons for fun, that will cost 2,000 yuan, the letter said.

More than 1 million yuan is collected from booth owners every year as punishment, it said.

Later in the letter, Wang said he hoped government officials will investigate the tax evasion immediately and nationalize the market in order to provide a good environment for intellectual property right (IPR) protection.

Wang quit his job in early July this year and later the market began looking for a new general manager with a yearly salary of 500,000 yuan.

The market has been popular with foreign tourists since the 1980s.

The local government has begun to crack down on fake goods in order to rehabilitate the mall, which was facing complaints and lawsuits from world-famous brands.

During Wang's term, a series of steps towards IPR protection were taken by the market, such as launching its own SILKSTREET brand in January last year and clearing hundreds of stalls selling fakes out of the market.

An official who refused to be named in the Beijing Administration for Industry and Commerce, which collects taxes, said they had not received such a letter from Wang.

Zhang Yongping, chairman of Silk Street Market, is in the US and will be back in September, Yu said.

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