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Fa piao 发票

I am interested in the way China manages receipts for various types of transactions. A fa pio is a type of super-receipt that is given for many transactions (large durable items, taxi, car rental and interesting to me, for restaurant meals).  It can act as a type of warranty and a contract and is also used by the Chinese Government to limit tax evasion.  You need a fa pio to claim refunds for expenses from business firms.

There are big differences between a receipt and a fapiao

  • Fa piao are issued in denominations, like currency so you can collect them. 
  • Fa piao also generally do not itemize what the purchase was for.
  • Fa piao sometimes include scratch off panels concealing authentication passwords that can be redeemed for prizes in a lottery! This is true for restaurant fa piao.   

Some businesses resist giving fa pio since they cannot then avoid tax.   The lottery prizes provide incentives for buyers to insist on a fa piao and hence help to force businesses to pay their tax. You can trade usually trade a fapiao for a slight discount (around the 6% the company will pay in taxes for issuing one).  

As far as I know this ingenious system is unique to China. The main interest to me is the idea of using a lottery as a means of limiting tax evasion. Of course tax evasion will not be eliminated by a fa piao as a tax-avoidance deal can always be devised between customer and vendor that advantages both b y avoiding the tax but it does limit evasion. I wonder if the ATO has thought of applying this to our own service sector.

12 comments to Fa piao 发票

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  • Jim

    Brunswick’s economy would cease to function were these introduced here.

  • All receipts in Taiwan contain an entry to the lottery.

    Foreigners can win – many charities etc collect the receipts off people. $1 aud =30 $NT
    ==
    There is a colorful number circle in every receipt, and every two months a drawing is held on the 25th of the following month. For all the receipts gathered in January and February, a drawing is held on March 25th. Every time the period of receipts changes, the color of the receipt changes. There are two categories of prizes: The Grand Prize, for which all numbers must match, and a series of First Prizes, for which partial matches can garner you some money. If you’d like to be notified when the new numbers are pulled, sign-up for free today and we’ll shoot you a message.

    For the Grand Prize of NT$2 Million, you must match all the “Grand Prize” numbers.
    For the first prize numbers, however, you can match 3, 4, 5… and still be in the cash.
    There is a tax for prizes over NT$1000
    You must bring your ARC for prizes over $NT1,000
    The numbers must be matches from the last to the first number.
    You can claim your money for three months
    For prizes of NT$200, you can claim them at 7-11.

    http://www.tainanbulletin.com/taiwan-receipt-lottery/435

  • I once won $6 aud and collected at the local 7-11

  • Receipt lottery may yield NT$10 million top prize next year
    The Uniform Invoice Lottery, better known as the receipt lottery, may up its highest winning prize to NT$10 million by next year, according an announcement by the

    Finance Minister Lee Sush-der said that the National Treasury will increase the total prize value to NT$7.9 billion in 2011, adding that it has not ruled out the possibility of setting a NT$10 million prize.

    According to an existing tax act, 3 percent of the annual national sales tax goes to the Uniform Invoice Lottery. From tax revenue this year, the projected budget has increased to NT$7.9 billion, up NT$2.6 billion from the NT$5.2 billion allotted prize money this year.

    Lee said in 2009 there were 1,357 Uniform Invoice Lottery winnings and almost NT$4.7 billion issued in prize money. Next year’s total monetary winnings are projected to increase by 50 percent. Plans to draw up more winnings and numbers are underway and may include six additional NT$200 prizes or upping the amount in the NT$2 million “Special Prize.” Regardless, the chances of winning something next year have significantly increased, Lee concluded.

    Further, plans to introduce electronic invoices are also underway and projected to debut next year at the earliest. Lee said consumers will be given the choice of paper or electronic invoices when making a purchase, adding that e-receipts will by no means be mandatory.

  • hc

    Thanks FXH, I am very interested in your remarks about Taiwan which I will follow up. I am glad someone else observes and is interested in the fa piao institution.

  • People have a huge clip of receipts on the fridge. If you go to 7-11 (there are many chains of 7-11 types stores – one on every corner) you can get a receipt for each little purchase. Its not like petrol vouchers here where you have to have over $30 or so and can only redeem at certain places. It national too.

    Some people pickup receipts off the ground and others just give all their receipts to an old aunty or young kids or someone or say the local school or aged care. Some shops have a tin you can donate receipts to.

  • observa

    A switch to resource taxing would kill tax evasion and avoidance stone dead among its other great benefits. Doesn’t happen because Govts everywhere would rather put up with all the other downsides of income tax in order to maintain increased taxation by stealth. Suits the ‘MKT’ mindset-
    http://www.atimes.com/atimes/Global_Economy/LK13Dj01.html

  • observa

    Don’t you just love that MKT statement-
    ‘Any reserve currency needs a supply that can grow as rapidly as global trade. Gold supply falls significantly short of that basic requirement.”
    Gold goes from $850 to $1400 an oz and still they don’t get it while apparently lottery tickets are the answer to gouging more out of the increasingly recalcitrant plebs. Trust them, they’re from the Gummint and they’re there to help!

  • observa

    And a subset of the universal resource taxing set is of course a MRRT-
    http://www.businessspectator.com.au/bs.nsf/Article/OECD-warns-over-MRRT-NBN-budget-impact-pd20101114-B77FS?OpenDocument&src=hp4
    Moving in the right direction chaps PROVIDED they don’t use it as an excuse to up the overall level of taxation and profligate spending which is of course the thinly veiled warning to the usual suspects. You don’t know what a ‘reserve fund’ is Wayne? That’s ‘Future Fund’ to you sonny.

  • observa

    And here’s another fast emerging reason for giving up on income taxing and moving to total reliance on resource taxing-
    http://www.news.com.au/business/foreign-farm-raiders-buy-9bn-of-aussie/story-e6frfm1i-1225953501132
    It’s all moving a bit too fast for salvaging income taxing via lottery tickets Harry.(and we can get rid of that deadweight and xenophobic FIRB at the same time)

  • observa

    To refresh your memory-
    Ditch ALL forms of taxation for carbon and resource(rent?) taxing including land use as a resource from zero for land held as natural environment to a maxm for concrete/building/bitumen cover and an ANWT for the top end of town for equity, with an exemption from that wealth taxing for wealth held as natural environment(ie in trust for all generations)and a franking credit for expenditure on creating or protecting same (ie the Walmesley Earth Sanctuaries road) That’s a true green constitutional marketplace to give Gaia countervailing market power to its destruction without the futile watermelon rubbish we’re getting spoon-fed now. Oh and listen to the Austrians re funny money printing so we can have true pricing without these perpetual, moronic Keynesian booms and busts.

    It aint the marketplace greenies. It’s the constitution of the marketplace stoopids!

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