Riding on an unprecedented property boom, Chinese real estate developers are fudging their account books to evade tax, an official investigation has found.

The ministry of Finance has investigated 39 real estate companies involved in 133 development projects around the country since 2005. The probe showed that most of these companies manipulated profit rates totaling 418 million US dollars in 2005.

As property prices soar in China, property firms have vehemently denied reports that their profit level is much higher than most industries. "Some companies did it in a very serious way," Geng Hong, director of the ministry's monitoring and investigation department, said.

The averaged profit rate as reported by the 39 companies was 12.22 per cent, but after investigators began examining their accounts, the average rate was 26.79 per cent. "One of the companies even had a profit rate of 57 per cent, but it never reported the figure," the official said.

Real estate companies caught "cooking the books" will have to rectify their accounts and pay the full tax amount and serious offenders will be taken to court, the official warned.

Source:佚名