Lawyer: Tax authorities impeding Ai Weiwei appeal

[November 14, 2011]  BEIJING (AP) -- Chinese tax authorities are impeding efforts by Ai Weiwei's design company to challenge a huge tax bill, a lawyer for the company said Monday, potentially setting up a showdown that could cause more legal problems for the dissident.

Ai, an internationally acclaimed conceptual artist, was detained for nearly three months earlier this year during an overall crackdown on dissent. The detention and subsequent tax evasion investigation have been interpreted by activists as punishment for Ai's outspoken criticism of the authoritarian government.

The Beijing tax bureau is demanding that Ai's design company, Beijing Fake Cultural Development Ltd., pay 15 million yuan ($2.4 million) in back taxes and fines. To help him fight the case, thousands of Ai's supporters have sent money through wire transfers or thrown cash stuffed in envelopes or wrapped around fruit into his yard.

Fake Cultural must put down a financial guarantee of 8.5 million yuan ($1.3 million) by Wednesday to obtain an administrative review of the case, the firm's lawyer Pu Zhiqiang said.

With nearly 8.7 million yuan ($1.4 million) sent to him in recent days by supporters, Ai was planning to be the guarantor and offer a bank deposit certificate as collateral, Pu said.

But the tax bureau told Fake Cultural's tax attorney Monday that it wanted the money paid into one of its accounts instead, Pu said.

The lawyer said the tax bureau's request was illegal because Chinese law stipulates that a person trying to challenge a tax bill can use a deposit certificate as collateral for a guarantee.

Pu said the company wants to fight the tax evasion allegation, and to do that it cannot take any actions that might be interpreted as an acceptance of the tax evasion accusation.

"I think whether or not putting money into a tax bureau bank account is a sign of acceptance, we are not prepared to do that," Pu said, adding that he was also concerned getting the guarantee money returned would be difficult should Ai win the case.

A call to the propaganda office of the Beijing tax office rang unanswered Monday. But Foreign Ministry spokesman Liu Weimin said at a regular briefing that there was no doubt Ai had evaded taxes. "It's a fact and the case should be handled in accordance with law," Liu said.

Pu said the case was politically driven. "Today because we can't bear it any more, we'll speak the truth. ... The tax case against Fake company is a political case, a persecution that has been caused by the political background," he said. "We are urging the administrative organ to implement the law normally, stop acting foolishly in the future."

It is unclear what will happen if the issue cannot be worked out by Wednesday, but Ai and the company cannot take the case to a higher authority without first obtaining an administrative review, Pu said.

The donation campaign is rare for Chinese dissidents because of the threat of retaliation that comes with supporting high-profile government critics. In a commentary last week, however, the state-run Global Times newspaper cited unnamed experts as saying Ai could be suspected of "illegal fundraising."

Ai has said that he will not treat the money from supporters as donations, but as loans that he would repay.

The company's lawyers say authorities have not proven that Ai is the owner of the design firm or that he had evaded taxes. Ai's wife, Lu Qing, is the legal representative of the design company.

[Associated Press; By GILLIAN WONG]

Associated Press writer Louise Watt contributed to this report.

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