Chapter Seven Legal system market regulation and supervision

1. Chapter Seven Legal system market regulation and supervision

2. Part One Price of the legal system

3. Overview of price law This Law is enacted with a view to standardizing the price acts, giving play to the role of price in the rational allocation of resources, stabilizing the overall price level of the market, protecting the lawful rights and interests of the consumers and operators and promoting the sound development of the socialist market economy.

4. Overview of price law The State practises and gradually perfects the price mechanism shaped mainly by the market under macro economic regulation and control.Determination of prices shall be in line with the law of value, prices of most commodities and services shall be the market-regulated prices and prices of an extremely small number of commodities and services shall be the government-guided prices or the government-set prices.

5. The legal system of price • This Law shall be applicable to price acts taking place within the territory of the People's Republic of China. • The prices referred to in this Law include the prices of commodities and the prices of services. • The prices of commodities mean the prices of all kinds of visible products and invisible assets. The prices of services mean collection of fees for all kinds of paid-for services.

6. The legal system of price • The operators have the following rights in the conduct of price activities: • (1)autonomous determination of prices under market regulation; • (2)determination of prices within the range prescribed by government guided prices;

7. The legal system of price • (3)determination of prices for trial sale of new products within the scope of products of government-guided prices and government-set prices with the exception of specific products; • (4)report or filing a charge against acts infringing on his/her right of autonomous determination of prices in accordance with law.

8. Legal liability • Any operator who causes consumers or other operators to pay more prices for illegal price acts should refund the portion overpaid; where damage has been caused, liability for compensation shall be borne according to law.

9. Legal liability • Any operator who has been ordered to suspend relevant business operations but does not suspend the operations, or transfers, conceals and destroys properties registered for safekeeping in accordance with law shall be imposed a fine of more than 100% less than three times of the relevant business revenue or of the value of the properties transferred, concealed or destroyed.

10. Legal liability • Whoever refuses to provide information required for supervision and inspection in accordance with the provisions or provides false information shall be ordered to make a rectification and administered a warning; whoever fails to make a rectification on expiry of the specified time period may be imposed a fine.

11. Part Two Tax law system

12. Overview of tax law • Tax law covers the rules, policies and laws that oversee the tax process, which involves charges on estates, transactions, property, income, licenses and more by the government. Taxation also includes duties on imports from foreign countries and all compulsory levies imposed by the government upon individuals for benefit of the state.

13. Overview of tax law • Taxation is a governmental assessment upon property value, transactions, estates of the deceased, licenses granting a right and/or income, and duties on imports from foreign countries. It includes all contributions imposed by the government upon individuals for the service of the state.

14. Overview of tax law • Taxes are usually divided into two main classes: direct and indirect. Generally speaking, direct taxes are those assessed against income, land or real property, and personal property, which are paid directly to the government; whereas indirect taxes are assessed against articles of consumption, such as products or services, but collected by an intermediary, such as a retailer.

15. Turnover tax • A turnover tax is a tax applied to a product at a specific stage of production, rather than being assessed at the point of sale, as with sales taxes. In some regions, this type of tax is interchangeable with a value added tax (VAT), while in others, the two terms may be used slightly differently.

16. Turnover tax • Around the world, tax systems are highly variable, but many have adopted some form of the turnover tax, as it is perceived as more fair in some settings because it involves distributing the cost of taxation across the production process, rather than imposing it on the end consumer alone.

17. Turnover tax • The turnover tax is a form of indirect tax, collected by third parties rather than the government itself. Businesses must comply with the aspects of the tax code concerning indirect taxes, collecting taxes as directed and logging transactions eligible for taxation. This information is submitted at the time that taxes are paid to demonstrate how much was collected on behalf of the government.

18. Income tax • A tax that governments impose on financial income generated by all entities within their jurisdiction. By law, businesses and individuals must file an income tax return every year to determine whether they owe any taxes or are eligible for a tax refund. Income tax is a key source of funds that the government uses to fund its activities and serve the public.

19. Income tax • Most countries employ a progressive income tax system in which higher income earners pay a higher tax rate compared to their lower earning counterparts. The first income tax imposed in America was during the War of 1812. Its original purpose was to fund the repayment of a $100 million debt that was incurred through war-related expenses.

20. Tax administration • Tax Administration proper is the fourth theme. Beginning with the interaction between policy and administration, the knowledge entries here deal with organization, management, functions, and resources of tax administration.

21. Tax administration management and functions • The first information related function is Identification of taxpayers followed by their Registration as taxpayers and, for most major taxes,the assignment of a assigning taxpayer identification numbers. Other information functions include, at the preliminary stage collection of information from third party sources including, importantly,

22. Tax administration management and functions tax withholders, accessing asset ownership information (such as cadastral records), engaging in taxpayer education and providing taxpayer services to keep their compliance burden low. • Verification of the correctness of tax payments starts with return Filing control followed by Assessment of tax liability of the taxpayer.

23. Tax administration management and functions Among the major types of assessment activities are Valuation and Tax Audit the latter activity typically being the most important function of tax administrations from the perspective of resource use. To establish tax evasion or to facilitate identification of non-filers Investigation and inspection are also necessary.

24. Tax administration management and functions • If prima facie non-compliance is established, then Penalties and prosecution of tax offenders may be required. Actual Tax collection is divided into two functions, mechanical collection of taxes from those who pay voluntarily on time and collection of delinquent taxes.

25. Tax administration management and functions In some countries a substantial part of the capacity of tax administrations is absorbed by the execution of non-tax related functions, such as the collection of user charges and fees for other government agencies. • Those kinds of responsibilities should be critically reviewed to allow the tax administration to concentrate on its main function.

26. Tax administration management and functions • In several countries, Amnesties are declared for different reasons. Amnesties, of course, must be administered and not just enacted. The final function of tax administrations covered here, again largely information related and becoming increasingly important, is International tax cooperation with other administrations.

27. Part Three Technical supervision of the legal system

28. Measuring Law • That which is used as a rule to determine a quantity. A certain quantity of something, taken for a unit, and which expresses a relation with other quantities of the same thing. • The constitution of the United States gives power to congress to "fix the standard of weights and measures." Art. 1, B. 8. Hitherto this has remained as a dormant power, though frequently brought before the attention of congress.

29. Measuring Law • The states, it seems, possess the power to legislate on this subject, or, at least, the existing standards at the adoption of the constitution remain in full force. 3 Sto. Const. 21; Rawle on the Const. 102. • By a resolution of congress, of the 14th of June, 1836, the secretary of the treasury is directed to cause a complete set of all weights and measures adopted as standards,

30. Measuring Law • and now either made or in the progress of manufacture, for the use of the several custom-houses and for other purposes, to be delivered to the governor of each state in the Union, or to such person as he may appoint, for the use of the states respectively, to the end that an uniform standard of weights and measures may be established throughout the United States.

31. Measuring Law • Measures are either, 1. Of length. 2. Of surface. 3. Of solidity or capacity. 4. Of force or gravity, or what is commonly called weight. (q.v.) 5. Of angles. 6. Of time. The measures now used in the United States, are the same as those of England.

32. Standardization law • A framework of agreements to which all relevant parties in an industry or organization must adhere to ensure that all processes associated with the creation of a good or performance of a service are performed within set guidelines. This is done to ensure the end product has consistent quality, and that any conclusions made are comparable with all other equivalent items in the same class.

33. Standardization law • This Law is formulated with a view to developing the socialist commodity economy, promoting technical progress, improving product quality, increasing social and economic benefits, safeguarding the interests of the state and the people and suiting standardization to the needs in socialist modernization and in the development of economic relations with foreign countries.

34. Standardization law • The tasks of standardization shall include the formulation of standards and organization of and supervision over the implementation of the standards.Standardization shall be incorporated in the plan for national economic and social development.

35. Part Four The legal system of economic oversight

36. Accounting Oversight • It was supposed to be a brand-new world of oversight of crooked auditors. • The Public Company Accounting Oversight Board, a new watchdog group, was put in place a few years ago to toughen oversight of auditors, who had been accused of abetting white-collar crooks and of being partly to blame for the wave

37. Accounting Oversight of corporate accounting scandals (think Arthur Andersen and Enron). • The board was established by the Sarbanes-Oxley Act, a 2002 federal law passed to clean up accounting scandals at companies like Enron and WorldCom.

38. Audit supervision • The combination of global accounting scandals that exposed large scale collusion between audit firms and corporate management and the shenanigans at A F Ferguson have had their impact on India’s auditing industry. Auditors are rushing to clean up their act and also resigning from difficult assignments.

39. Audit supervision • Recently, A F Ferguson quit its assignment with Zuari Agro on the eve of its general body meeting. DSQ Software changed its auditor recently, after a falling out with the previous one. But its new auditor too has punctuated its accounts with innumerable qualifications.

40. Audit supervision • Similarly, Ispat Industries’ auditors have picked several holes in its books.

41. Thanks for Your Attention