Markets in everything, China edition

by on August 20, 2007 at 3:39 pm in Economics | Permalink

…there are now Chinese companies that are happy to sell you fake receipts that look just like the real thing.

But what if they sold you a "fake receipt" for buying…*fake receipts*.  Would it be a fake receipt, a real receipt, or a real fake receipt?  Here is the story, and thanks to Derek for the pointer.

save_the_rustbelt August 20, 2007 at 3:59 pm

During the 90s an American company sold bags of fake restaurant receipts (the small strip from the bottom of the check) to assist with padding expense accounts.

Don’t know what happened to them, but it was an interesting notion of ethics.

Matthew August 20, 2007 at 4:07 pm

Actually, the blog post you link to over-complicates why someone would buy a fake receipt in China. The main reason is to skim money from one’s employer by abusing fapiao (invoice) privileges. It’s not the companies trying to cheat on taxes so much as employees trying to pad their incomes. Because of this, at every major Chinese airport or train station, fake fapiao sellers offer their wares to unscrupulous businessmen returning home after business trips and hoping to stick their employers with a fat bill.

Scott August 20, 2007 at 5:08 pm

I second Matthew’s observation that is more about personal enrichment by employees at the expense of their employers. However, the tax-evasion aspect is definitely a part of what is going on. A couple years ago, the government tried to crack down on fake receipts by standardizing the receipt form and making them into mini-lotteries in which you could win cash prizes by asking for an official receipt from a restaurant or wherever. I believe the idea was mainly to encourage consumers to ask for official receipts so it would be harder for businesses to fake out the tax collectors.

anonymous August 20, 2007 at 6:25 pm

There’s a Chinese learning podcast about this very word, for anyone who’s curious about how it’s pronounced.

发票
fāpiào

zlguocius August 20, 2007 at 8:04 pm

I <3<3 China!

/sniffle

Matthew August 20, 2007 at 10:56 pm

Actually, Scott, that has me puzzled a little. If I ask for a fapiao from a restaurant, taxi service, or other company, then this creates a paper trail that will force said company to pay taxes on the income earned from my business. But if I have a fake fapiao and give it to my employer, and then those fapiao are given to the government by my employer to claim operating expenses, would anyone bother to check on it?

Also, the standardized “lottery voucher” fapiao don’t seem to be used in all businesses. For taxis in particular it seems like there’s a large volume of real fapiao to be recycled to anyone who wants to abuse them for profit. And Green Apron Monkey is right that taxi drivers are very generous with the fapiaos.

Murphy August 21, 2007 at 3:31 pm

In the US we just make it legal. I get 3% back on my American Express. So when a corporate dinner or lunch comes up, I make sure I pay. I get reimbursed by my employer before the bill comes in, I get the meal paid off with corporate cash and collect my 3% at the end of the year. Not getting rich, but it buys a new bike or stereo each year tax free. Not the magnitude of China, but legal things never have the same margins as illegal things.

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AnnaS November 20, 2010 at 9:58 am

People do this because of the greed for money induced by capitalism and others do it because they have a paycheck that doesn’t reflect the quality of their work… so… no matter how you analyze the problem, things will have to change if we want some ethics to survive… Global Visas

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