When a Receipt is Not a Receipt
This article was first written when I was working in China.
I suspect virtually all foreigners working here in China, if they ever need to purchase anything and claim from the company, would get burnt by the strange financial procedures.
I remembered early on in my career in my school, that I needed to buy something for the school. They cost about RMB250 (about USD30 or SGD50) and I asked for a receipt from the stall. They gave me a handwritten receipt with the company stamp – something which would certainly be OK back in Singapore.
Not here in China. Finance rejected these receipts, indicating that only proper official receipts with the word 发票 fapiao on them could be accepted. So there went my RMB250. After a while, I get to understand why the Chinese are so reluctant to buy something on behalf of the company, and to pay first.
Recently, something happened again – this time to my own department teacher. My teacher bought something for the school, and got a receipt with the 发票 fapiao stamped on it. But when I tried to claim at Finance – they rejected it! Why? Because only official receipts with the 发票 printed, not stamped, are accepted! It was amazing to me as a foreigner how stuff could get done with all that barriers being placed to hinder efficiency.
Along the way I begin also to understand why there is a need for this fapiao when a receipt would do in more developed parts of the world. Tax evasion is rampant in China, and so indirect taxation became very necessary. Fapiao has to be bought at the Finance Bureau, and stands in lieu of taxes paid. A book of RMB1000 fapiao will cost RMB130 because the sales tax involved is 13%. To encourage people to take the fapiao from vendors (and hence ensure they are taxed), all forms of financial accounting require this fapiao to expense off any spending.
I can also appreciate why things get done slowly here. Everything is stifled and choked by a morass of bureaucracy. No wonder Singapore, a tiny country with no resources, can survive and do well. We compete on pure and simple efficiency!
I suspect virtually all foreigners working here in China, if they ever need to purchase anything and claim from the company, would get burnt by the strange financial procedures.
I remembered early on in my career in my school, that I needed to buy something for the school. They cost about RMB250 (about USD30 or SGD50) and I asked for a receipt from the stall. They gave me a handwritten receipt with the company stamp – something which would certainly be OK back in Singapore.
Not here in China. Finance rejected these receipts, indicating that only proper official receipts with the word 发票 fapiao on them could be accepted. So there went my RMB250. After a while, I get to understand why the Chinese are so reluctant to buy something on behalf of the company, and to pay first.
Recently, something happened again – this time to my own department teacher. My teacher bought something for the school, and got a receipt with the 发票 fapiao stamped on it. But when I tried to claim at Finance – they rejected it! Why? Because only official receipts with the 发票 printed, not stamped, are accepted! It was amazing to me as a foreigner how stuff could get done with all that barriers being placed to hinder efficiency.
Along the way I begin also to understand why there is a need for this fapiao when a receipt would do in more developed parts of the world. Tax evasion is rampant in China, and so indirect taxation became very necessary. Fapiao has to be bought at the Finance Bureau, and stands in lieu of taxes paid. A book of RMB1000 fapiao will cost RMB130 because the sales tax involved is 13%. To encourage people to take the fapiao from vendors (and hence ensure they are taxed), all forms of financial accounting require this fapiao to expense off any spending.
I can also appreciate why things get done slowly here. Everything is stifled and choked by a morass of bureaucracy. No wonder Singapore, a tiny country with no resources, can survive and do well. We compete on pure and simple efficiency!
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