Chinese trial over fake receipts

The operation could have cost billions in tax revenue, officials said

Five men are to appear in court in China charged with producing fake receipts that could have cost the state billions of dollars, state media said.

The men are accused of forging over one million receipts worth a total of $147bn (£72bn) at a factory in Guizhou province.

Police identified the fraud after seizing a batch of the fake receipts in August 2007.

It is the largest such case in over 50 years, a local security official said.

'Almost the same'

The authorities found the first batch of fake receipts on a coach travelling between Guizhou and Yunnan provinces.

This led police to one of the suspects and from there to the factory in Guizhou's Xingyi county.

"The fake receipts that were confiscated could load two lorries," Chai Jiaping, deputy head of the Qujing Municipal Public Security Bureau, told Xinhua news agency.

The five men will be tried at Luoping County People's Court in neighbouring Yunnan province.

"The fake receipts look almost the same as the real ones," Tang Xiaozhou, Luoping's taxation chief, told Xinhua.

"Consumers and even the tax collectors find it hard to distinguish."

"If put into the market, the national treasury would have lost more than 75bn yuan ($10.5bn, £5bn) in tax revenue."

Because of China's rapid economic growth, tax revenues have soared in recent years.

But the authorities have admitted that they need to improve tax collection, and take more action against people failing to report their true income.

There is an active black market for fake receipts in China, which companies can use to claim tax rebates on business expenses.

Last month Li Linjun, spokesman for the State Administration of Taxation, announced a crackdown on fake receipts.