China to cap pay of actors

Forbes ranks Fan Bingbing as the world's fifth highest-paid actress in 2016. Photo: Reuters

Chinese authorities have recently vowed to cap the pay of actors, in a move to crack down tax evasion and money worship in the country's film industry, according to the Xinhua News Agency.

Five government agencies including the Publicity Department of the Communist Party of China (CPC), the Ministry of Culture and Tourism, the State Administration of Taxation (SAT), the State Administration of Radio and Television and the Film Bureau issued a joint statement on June 27, saying "China's film and television industry maintains a sound momentum of growth in general, but immediate actions need to be taken to deal with sky-high pay for actors, double contracts, tax evasion and other issues."

"These problems have damaged the health of the film and TV industry and led to money worship, youth blindly chasing celebrities and distorted social values," the notice added, without giving details about how the pay cap would be enforced.

"Payments to stars may not exceed more than 70 percent of a production's total wage costs, and salaries as a whole must be capped at 40 percent of a project's total production costs," the notice said.

"Productions should prioritize benefits to society rather than considering just box office returns, ratings and click-through rates," it concluded.

The move is seen as a response to a controversy over celebrity tax evasion that began last month.

On May 28, outspoken TV presenter and producer Cui Yongyuan alleged that leading actress Fan Bingbing used double contract to evade tax.

"Don't act, you really suck!" Cui posted on China's Twitter-like Weibo, along with screenshots of what appeared to be Fan's employment contract.

The document, which is blurred-out in places, states that Fan would earn 10 million yuan ($1.6 million) for just four days' work on a new movie and details several unconventional terms and conditions.

The barbs continued on May 29, when Cui revealed in another post that the 10 million yuan contract was in fact the smaller of the two contracts — with the other being worth 50 million yuan which was signed to avoid tax payment.

In response, Fan's studio published a public statement on Weibo on the same day, saying, "By exposing confidential contracts and publicly insulting Fan, Cui has not only violated business rules but is also suspected of infringing the legal rights of Fan."

The studio added that it had contacted a Beijing law firm and reserved the right to take legal action.

Cui's revelation has riled up the Chinese public, with some netizens showing their support to his attack on Fan.

The SAT on June 3 ordered local tax bureaus to launch a thorough investigation into the double contract issue and pledged to take stronger measures against tax violations, China Central Television reported.

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